Georgia Senate Bill 461 and Funding of the Marital Trusts

As a previous article stated, the Federal Estate Tax purported repeal and the new carryover basis rules could cause problems for older Wills of married persons where the Will is drafted to maximize the Federal Estate Tax Exclusion.  The Georgia legislature is in the process of passing a bill that would all the language of the older Wills to fully fund the marital trusts for the benefit of spouse until Congress settles whether or not there will be a federal estate tax.  This bill allows married Georgia residents to utilize the entire step up in basis provided under the current estate tax laws and will become effective when Governor Perdue signs it.  To view a text of Senate Bill 461, click here.

To recap the issue, as most Wills are currently drafted, a formula is used to maximize the federal estate tax allowance that is in existence at the time of a person’s death.  If a married individual dies in 2010, his entire estate would pour over to the Credit Shelter Trust under his will, leaving no assets to fund the Marital Trust which is necessary to maximize the spousal step up in basis).

If you are unsure of how your Will works or have questions about the funding of trusts under your Will, please give us a call.

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