Section 10 Joint Trusts and Tax Planning

• Library: Trust and Estate Legislation 2012

Because of this concern, use of the typical “true” joint trust, as was present in In re Bellingroehr, 403 B.R. 818, 821 (Bankr. W.D. Mo. 2009) (discussed above in §7), in which the spouses had joint control over all assets in the trust, has been traditionally avoided in common-law jurisdictions when estate tax planning is contemplated. If, in fact, all assets in a joint trust are controlled by both spouses, upon the death of the first spouse, any property passing into a credit shelter trust will be fatally tainted for estate tax purposes and included in the survivor’s estate, the exact result that the planning is attempting to avoid. Therefore, as in In re Stanke, 234 B.R. 439 (Bankr. W.D. Mo, 1999) (discussed in §7 above), estate planners in...