With Congress taking up tax reform soon, one thing that many people are following is President Trump's desire to eliminate the estate tax.
It is important for many people because the estate tax can take a sizeable portion out of an estate. Many people have designed their estate plans around not having to pay the tax.
If the estate tax is repealed, then people might have good reason to change their estate plans and they might decide to get rid of their trusts.
That is one of the main reasons people get trusts. They are a way to avoid the estate tax.
However, do not plan on scrapping your trust yet, since there are other reasons to get trusts than the estate tax, as Elder Law Answers discusses in "Are Trusts Still Useful If the Estate Tax Is Repealed?"
One of the best things about trusts is that they do not have to go through the probate process, which can be very expensive and time-consuming, depending on the state in which you live.
Trusts can also be kept private so your estate plan is not shared with the general public, as is often the case with wills.
Trusts can be used to pass your assets to beneficiaries in a controlled way and only after certain conditions are met. The truth is that trusts are an extremely versatile estate planning tool and beneficial with or without an estate tax.
It is too soon to know if the estate tax will be repealed.
If it does happen, do not let it fool you into thinking you no longer need a trust.
Reference: Elder Law Answers (June 30, 2017) "Are Trusts Still Useful If the Estate Tax Is Repealed?"