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New Estate Tax Savings For Floridians

New Estate Tax Savings For Floridians - Siegel Law Group - Boca Raton, FL 33431

A Trust is an essential tool in Estate Planning. It involves creating a legal document in which you transfer ownership of property and assets to a trusted third party, or trustee. Once funded, you can designate beneficiaries and dictate the terms for how distributions are made.

For married couples, Spousal Limited Access Trusts (SLATs) protect assets, shield against creditor claims and help avoid estate taxes and gift taxes. However, previous Florida state laws limited protections for the primary contributor. Recent amendments to state laws help to rectify the situation. These changes make creating a SLAT easier and provide greater estate tax savings for Florida residents.

Spousal Limited Access Trusts: An Important Tool In Estate Planning For Florida Couples

For married couples, creating a Joint Trust can provide numerous benefits. It aids in

  • planning for the future
  • defraying the high costs of long-term care
  • avoiding potentially time-consuming and costly Probate Court proceeding
  • ensuring beneficiaries are provided for properly.

When considering the type of Trust to create, Spousal Limited Access Trusts (SLATs) are an excellent option. SLATs offer immediate benefits in terms of asset protection while also shielding you from creditor claims and estate taxes.

Avoiding Estate Taxes and Gift Taxes Through Spousal Limited Access Trusts

SLATs are a type of Trust created by one spouse for the benefit of the other. The person creating the Trust, referred to as the contributing spouse, funds it with individual or jointly owned property and assets. The receiving spouse can then use the Trust to pay up to one-half of the couple’s living expenses while any remaining funds pass directly to them in the event of the contributing spouse’s death.

Among the most significant benefits of Spousal Limited Access Trusts are that it protects assets from creditor claims and allows one person to transfer money or ownership in property to another without being subject to estate taxes or gift taxes. However, certain conditions apply:

  • To be shielded from creditor claims, the contributing spouse must not be a beneficiary;
  • If the contributing spouse serves as trustee, they are limited in taking distributions;
  • Suppose a third party serves as trustee and makes distributions over and above what the court would deem necessary. In that case, the entire Trust could be subject to estate taxes.

New Estate Tax Savings For Floridians:
Changes In State Law A “Gift” to Florida Residents

The fact that contributing spouses in Florida cannot be named as beneficiaries in SLATS puts them at a disadvantage, both in receiving distributions and in being subject to either estate taxes or gift taxes. Fortunately, Florida Governor Ron DeSantis recently signed a new trust law that amends the current Estate Planning code. A May 2022 Forbes report describes the change as a ‘gift’ to Florida residents.

The amendment to Florida Statute 736.0505(3) now allows a contributing spouse to be added as beneficiaries to SLATs, providing them with creditor and estate tax protections. The new law applies to Trusts created or funded after June 30, 2022.

To Find Out More About SLATs, Request A Consultation With Our Boca Raton Estate Planning Attorney

Spousal Limited Access Trusts (SLATs) play an essential role in Estate Planning. Fortunately, recent changes in state laws now provide even greater estate tax savings for Florida residents.

At The Siegel Law Group, we can guide you in creating SLATs and other legal documents designed to protect you, your loved ones and your assets now and in the years to come. To discuss your specific needs and the options available, call our office at 561-955-8515 or contact our Boca Raton Estate Planning Attorneys online and request a complimentary consultation today.

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