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Gertie was 92 and in failing health. Way back in the 1960s her husband Edward did some estate planning seeking to provide financial confidence for Gertie and the kids, and to minimize estate taxes.

Included with the estate documents was a revocable trust that provided income for Gertie and allowed for gifts to the children. It also allowed the trustee to “withdraw funds to reduce the amount of estate and inheritance tax payable” upon Gertie’s death.

We ran an estate tax flow analysis and found that while Gertie’s estate would not be subject to federal estate taxation, there would be Maryland taxes due of $132,700.

The solution was to gift enough of the trust assets needed to eliminate the tax to the three children. These gifts would not be subject to any tax.

As we do not practice law, we met with our clients, and their estate planning attorney, who urged them to act on the gifts as soon as practicable.

Several months later, Gertie passed after a good long life. We think Edward would smile knowing that his planning, which had begun in the 1960s and was routinely updated, stood the test of time by providing for Gertie and their children.

The hypothetical example above is for illustrative purposes and is not representative of any actual experience. Individual results will vary.

Brightworks Wealth Management and LPL Financial do not provide tax or legal advice or services. Please consult your legal tax or advisor regarding your specific situation.

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