bm30003700@aol.com
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 Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Funding Bypass Trust |
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My client's attorney is looking at various options for
funding bypass trust created by death of my client's spouse
in 2003. The estate is just now closing.
The attorney can include the deceased spouse's community
interest in the couple's residence, or fund it from other
assets, from a stock portfolio.
I've heard it said that, when the bypass trust is funded
soon after the deceased passes away, it is often
advantageous to use the residence to fund the trust, as the
surviving spouse receives benefit from the trust just by
living in the residence, without actually receiving income
that is taxable.
However, it is my understanding that, if the residence is
placed in the bypass trust now, appreciation between estate
tax return value of the residence and current value is taxed
to the estate on the 1041.
Is there still reason to put the deceased's community
property interest in the trust, at this point, if the
residence has greatly appreciated beyond the value on the
estate tax return?
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