Certain Trusts Take The Sting Out Of Estate Tax Increases

July 22, 2021

As Washington mulls possible increases to estate taxes, clients still have strategies to consider to help them remove the sting.

One of those strategies is to make gifts to trusts, which can take advantage of high tax exemptions and remove future appreciation of assets from taxable estates. One strategy available to spouses is to make a gift to a trust that allows for a qualified terminable interest property (QTIP) election.

“The real advantage … is that the QTIP election is made on the 2021 gift tax return, which is filed in 2022, and the choice can be made at that time on how much of the transfer will be subject to tax,” said Azriel Baer, counsel in the trust and estates group at the law firm Farrell Fritz in Uniondale, N.Y.

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