We have been advised to hire a lawyer to draw up a "family trust" to avoid paying too much money to the government. Our wills do not cover this. Would this be advisable? --
Two answers are possible to your letter, which is not completely clear. If by "family trust" you mean a living trust, your assets are held in trust while you live, and at death your assets are dispersed without probate. Your federal estate taxes and any state inheritance taxes will not be affected. A living trust avoids the delay, expense, and lack of privacy of probate. Wills can continue to control the conveyance of assets not included within the living trust. A different "family trust" could involve a revision of your wills.A "tax-saving trust" avoids double taxation on about half of your assets by placing the decedent's after-tax estate in trust for children or other beneficiaries, with income going to the surviving spouse until his or her death. That portion of the state placed in trust goes to the children or other beneficiary without a federal estate tax. An inheritance tax will likely be assessed.