Estate planning is a complex process with a wide array of options to consider. Most people approaching it share one goal in common: to maximize the value of their estate for themselves and those to whom they bequeath it, while minimizing its administrative costs and tax obligations. In order to fulfill all of those goals, it is important to keep up on the latest news about estate planning matters, including trusts.
Many developments happened in 2014. One was final regulations pertaining to Internal Revenue Code Section 67 having been issued by the Internal Revenue Service. Those regulations specifically delineate the circumstances under which it is permissible to deduct particular costs for income tax purposes even if they exceed an aggregate total that exceeds 2 percent of overall adjusted gross income. Those costs include some that are incurred by trusts and estates, making an understanding of these regulations valuable for the process of estate planning in general, especially when trusts are a part of it.
After all, estate planning necessitates clear balance sheets showing exactly how much tax obligation will be incurred by any given option compared to others. If, in accordance with these new IRS regulations, costs associated with a trust are deductible in your case that might provide a significant influencing factor for you to emphasize trusts in the allocation of funds within the context of your estate planning process.
Of course, working with trusts and other tools is complex and requires meticulous attention to detail as well as a clear understanding of the laws and regulations pertaining thereto. Correspondingly, it is always best to go over these matters with a qualified attorney.
Source: Wealth Management, "A New Array of Problems and Possibilities" Charles A. Redd, accessed Jan. 12, 2015