Planning to pass on your hard-earned assets to your loved ones is a heartwarming endeavor. You want to ensure that your family’s future is secure and that they inherit the wealth you’ve worked diligently to accumulate. However, the looming shadow of estate taxes can turn this blessing into a burden.
Florida residents, like many others, often face the challenge of minimizing estate taxes to ensure their heirs receive the maximum benefit. One solution that offers considerable advantages is the Marital Disclaimer Trust. At the Law Offices of John Mangan, P.A., we specialize in helping clients establish these trusts and navigate the intricacies of estate planning in Florida.
A Marital Disclaimer Trust, also known as a Qualified Disclaimer Trust, is a strategic estate planning tool designed to mitigate the impact of estate taxes while safeguarding the financial security of your surviving spouse. It involves the creation of a trust that allows the surviving spouse to disclaim or refuse a portion of the deceased spouse’s assets. By disclaiming these assets, they are then transferred into a Family Trust a/k/a Disclaimer Trust, thus potentially reducing the overall taxable estate.
Let’s illustrate the process with an example. Imagine a married couple, Sarah and David, with an estate valued at $14 million. Sarah passes away, leaving her entire estate to David. Since the current estate tax exemption is at $12.92 million, the estate is nearly $1 million over this exemption rate. Without proper planning, their estate would be subject to significant estate taxes upon David’s passing, potentially reducing the inheritance for their heirs.
However, Sarah and David have a Marital Disclaimer Trust in place. When Sarah passes away, David has the option to disclaim a portion of her assets. Let’s say he disclaims $5 million. This $5 million is then transferred into the Marital Disclaimer Trust. Since the assets in the trust are not considered part of David’s taxable estate, they are shielded from estate taxes. This strategic move could save their family a significant amount in estate taxes, ensuring a more substantial inheritance for their heirs.
Determining if a Disclaimer Trust is suitable for your estate plan depends on various factors, including your financial situation, goals, and family dynamics. Another thing you should consider is the estate tax exemption. In 2026, the estate tax exemption will be reduced to a projected inflation-adjusted amount of approximately $6.5 million, which means that many more households will be subjected to it. To make an informed decision, it’s crucial to consult with experienced estate planning professionals who understand the nuances of Florida’s estate tax laws.
At the Law Offices of John Mangan, P.A., our team specializes in crafting personalized estate plans that align with your unique objectives. Whether it’s establishing a Marital Disclaimer Trust or exploring other estate planning strategies, we are here to guide you. Secure your family’s financial future and minimize the burden of estate taxes. Contact us today at 772-266-5108 or fill out our Contact Form. Your legacy deserves meticulous planning, and we are here to help you every step of the way.