Moving on in life, there are a lot to think about and questions to consider when passing down assets to loved ones.

  • Are you married?
  • Is your marriage a partnership?
  • Are your children from the same marriage?
  • Do you have separate trusts?
  • Do you own a home?

If you answer yes to any of these questions, consider a Joint Legacy Trust.

With the new $5.34 million estate tax exemption, only about 0.14% of us will pay an estate tax. Owning a home and passing it on could cause a capital gains tax. Having a joint trust not only reflects and mirrors your life as a partnership, but other benefits include: simplicity, flexibility, and reducing capital gains tax.

The Joint Trust offers simplicity in that it eliminates the need for obtaining a Federal Identification Number and filing a trust income tax return when the first spouse dies; flexibility to accommodate change after the first spouse’s passing; and reduces capital gains tax by taking advantage of a “step-up” in basis, coined “freebasing” by Forbes Magazine.*

Separate Trusts were prepared when the estate tax exemption was $600,000 per spouse and helped to reduce estate tax. With an exemption of over $10 million per couple, most of us will not pay an estate tax, and our children may pay capital gains tax unless we change to a Joint Legacy Trust.

Stephen B. Yim, Attorney at Law | 2054 S. Beretania St., Hon. | (808) 524-0251 |

 * Forbes Magazine, March 2014: “Freebasing Your Estate”. If you would like a free copy of this article, please call me and I will be happy to send you a copy.