I am single; I already have a Trust.
Does it need revision due to the new 2001 Tax Law?

If you have a Trust using a formula which refers to the maximum tax free amount, it may need to be reviewed.

SINGLE PEOPLE:

If you are single it probably does not need to be changed. Most single people do not use a formula clause, but instead divide assets by percentages among heirs. The tax free amounts do not have any bearing on who inherits what portion. Examples:

1. When I die split it all (whatever is left over after taxes) equally between all of my children. This does NOT need to be changed.



2. When I die split it all (whatever is left over after taxes) equally between all of my brothers and sisters. This does NOT need to be changed.



3. When I die hold it all (whatever is left over after taxes) for the college education of my nieces and nephews. This does NOT need to be changed.



4. When I die give it all (whatever is left over after taxes) to Fred. This does NOT need to be changed.



5. When I die give $200,000 to Jason and the rest (whatever is left over after taxes) to Fred. This does NOT need to be changed.



6. When I die give it all (whatever is left over after taxes) to Charity. This does NOT need to be changed.



7. I am worth $1,000,000. I want to leave $600,000 to or for people (my kids, my brother, or a niece's college, etc.) and the taxable portion to charity, so the IRS gets NOTHING, ha ha ha!

• Under the new law, charity will get nothing because the taxable portion is nothing (because $1,000,000 is tax free in January, 2002). IF that is what the client wants, great, the Trust does not need change.
• Alternatively, if the client is charitable, the Trust needs to be changed.