Mar 1, 2008 12:00 PM

By Mary Lee Moseley & Julie Franck

Many professionals view the funding of trusts as insignificant and easily accomplished — particularly when there's a surviving spouse and no estate tax is due on the estate of the first spouse to die. But there are many tax-saving opportunities in subtrust funding. The converse is also true: Improper subtrust funding may result in serious adverse tax and non-tax consequences.

A taxpayer's death begins a period of tax opportunity and risk for trust and estate administration.¹ Against all common sense and experience, most testamentary documents seem to be drafted under the assumption that assets will be identified, valued and distributed in 24 hours. The reality is that the administration period can run for years. During that time, assets held in the trust generate income and change in value; they may be sold; new assets may be acquired. Fiduciaries need to consider the funding implications in every estate and trust administration, including when no estate tax is due. In particular, the nature of the marital deduction necessitates a tax analysis in every situation in which a trust document provides that, upon the death of the first spouse to die, the trust divides into a credit shelter trust and a marital trust (or marital share) for the benefit of the surviving spouse.

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

Click here to download the 2011 Trust Glossary

50 Years Ago This Month

Click here to read the issue.

50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

Click here to view the most up to date guide (September 2011)

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