Bypass trusts, or B trusts, have long been used as a strategy to help families avoid estate taxes. But with recent changes in income tax and estate tax rates, in many cases B trusts now trigger substantially higher capital gains taxes for beneficiaries or heirs without providing any estate tax savings. 

An existing B trust can be a ticking time bomb, detonating after the death of the surviving spouse. Private wealth professionals should advise clients with existing B trusts to review their situation with their tax attorney or estate planner to see if corrective action is needed.

An Estate Tax Time Bomb

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