L. Bruce Swiren, P.A., Attorneys at Law Free Initial Consultations
877-806-7949 407-287-5137


Protecting Your Legacy
For more than 35 years, individuals, families and businesses in Florida have relied on our law firm for help. You can too, call today for a free initial consultation.

New laws governing bypass trusts

Florida taxpayers might be pleased to hear that new laws governing bypass trusts could end up proving beneficial to them when tax time rolls around. Bypass trusts can now serve as potential income tax savings tools in addition to their customary role in estate planning.

Bypass trusts have traditionally been used to make sure that a spouse's assets passed on to the other spouse after his or her death without having to go through the probate process, so that the assets would not be subject to estate taxes. After the death of the surviving spouse the trust assets would be distributed to the remainder beneficiaries also free of estate tax. New rules that allow grantors to name beneficiaries in addition to their spouses can now have favorable income tax effects.

Although people cannot earn money and then have their family members who are in the lowest tax brackets report it, bypass trusts are exceptions. The beneficiaries of trusts are the ones who must report the distributed income on their tax returns. If a bypass trust names other beneficiaries in addition to the surviving spouse, the distributions can be directed in a manner that saves taxes. Therefore, when trustees are determining the recipients of a bypass trust's annual distributions, they may want to select beneficiaries in the lowest income tax brackets.

Other changes to bypass trust rules may have an effect on investment decisions and powers of appointment that a trustee makes. A person seeking to establish a bypass trust as part of a comprehensive asset preservation plan may wish to speak to an attorney who has experience in estate planning. The attorney may be able to suggest trusts and other instruments that may help in minimizing income and estate taxes.

Source: Financial Planning, "New Flexibility for Bypass Trusts", Martin Shenkman, October 01, 2013

No Comments

Leave a comment
Comment Information

Protecting Your Legacy
For more than 35 years, individuals, families and businesses in Florida have relied on our law firm for help. You can call today for a free initial consultation.

Meet Our Team of Attorneys

How Can We Help You?

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy | Business Development Solutions by FindLaw, part of Thomson Reuters.