How a Community Property Trust Can Save Tens or Hundreds of Thousands of Dollars in Capital Gains Taxes
Community property trusts can save your clients tens of thousands of dollars in capital gains taxes, and that is just one of their many benefits. This lesser-known strategy is not necessarily the best fit for all couples either because of their assets or state of residence. However, for households you work with that can make the most of them, it is a planning tactic that could have a significant impact on keeping more of the value of their estates in the family.
These trusts offer a huge benefit to couples who take advantage of them. There’s also a lot to gain for their financial advisors. Thanks to the double step-up for property held in this type of trust, your clients will retain a significant amount of wealth that would otherwise go to the IRS because of capital gains tax. So it is a solution that provides better cash flow for your clients and more assets under management for you: a win-win for all parties.
What is community property, and what is a community property trust?