Hello there and CONGRATULATIONS -- I heard the Supreme Court decisions the other week and am genuinely happy for you and for several of my friends who are now permitted to marry legally everywhere in the USA. It is now the law of the land and it is about time!
To answer your question, your real estate attorney is correct -- you will have to combine this in a single trust as a married couple in order to get the benefits of the higher amount of capital gains tax exception (assuming you will have that much equity in your property when either passes). In addition to this, you should review all of your other financial arrangements to make sure that they are in line with being a married couple (including any prenuptial agreements if you each want to protect individual assets). Please let me know if you have further questions.
Depending upon your ages and whether or not you have children, a prenup might be a good idea if each of you wants to leave specific items or assets to other persons who are not the heirs of your partner. That is the only reason I suggest considering it along with reviewing everything that you have individually and together in order to streamline it all as a married couple and gain the benefits of being married.
We are ages 74 and 75. Our present trusts list each other as the beneficiary of the other. All we are really concerned about is whether either of us will have to pay inheritance tax on the home when one of us dies.
Do we really need one trust for the both of us when we marry or is the present trusts that list us each as "a single man" sufficient to avoid inheritance tax upon the death of one of us?
Are you there Mary?
what is taking so long please?
Hello again --
I apologize for the confusion and thank you for the positive rating. Under federal estate tax law, an estate larger than 5.25 million is subject to federal taxes. If the two of you are married, the federal estate tax does not have to be paid until after the second spouse dies and the surviving spouse can add both deductions together for an estate of 10.5 million dollars -- anything less than that will pass tax free to the heirs of the surviving spouse (or, if the spouse who passes away first has made provisions to pass the funds along to certain designated heirs it can be delayed until after the second spouse dies in order to gain the full exemptions). Obviously, if your estate is not this large, then you do not have to worry about the federal estate taxes. Here is a good article from Forbes explaining the estate taxes and the benefits of marriage-- http://www.forbes.com/sites/deborahljacobs/2013/01/02/after-the-fiscal-cliff-deal-estate-and-gift-tax-explained/
I hope that helps. If the two of you have a large estate or trust then it may benefit you to combine everything into the one trust. If the amount is less than the amounts outlined in the statute (explained in the article) then you will not be hit with federal estate taxes anyway so it does not matter from a legal standpoint whether or not you combine the trusts into one trust as a married couple.
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