Watch Out for Estate Planning Schemes

In a little more than one year, high-net-worth individuals will no longer be able to take advantage of the federal estate tax limitations. The limitation on the federal estate tax exemption in 2024 is $13.61 million. A couple can benefit by having an exemption twice as much: $27.22 million.
Because the deadline is close, you must complete your estate planning strategies before the end of 2025. After that, all money more than $1 million above the exemption amount in your estate gets taxed at 40 percent.
People who are in the scamming business will usually target seniors because they are more easily deceived. They will try to create anxiety to cause you to believe that they have one of the few—if not the only—solutions to protect your assets from government taxes.
A SLAT is an irrevocable trust, which means you no longer have control over its assets. The difference is that your spouse can access it. Most often, there may be other beneficiaries—such as children—but they may not be permitted to take anything out until the death of the non-donor spouse.
The SLAT enables you to gift the trust up to the limit of $13.61 million if you want. It would be a quick way to reduce your estate and not worry about your beneficiaries having to pay federal estate taxes.
Your spouse can access the money in the trust when needed for support. A potential problem with this trust is that if you divorce or she dies, you will not have any more access to the funds. It could be a problem if you were planning on using some of that money for living expenses, medical costs, or long-term care.
Since you cannot change the trust documents on an irrevocable trust, a divorce would create another possibly undesirable problem. Your ex-spouse would still have access to the money in the trust after the divorce, but you may not get any of it.
Right now, the federal estate tax exemption gives you an excellent opportunity to reduce the tax liability on your estate. You can ensure that your estate planning and setting up a trust will be in good hands when you use an experienced estate-planning attorney. Learn the positive and negative aspects of any trust before completing the deal.