You should have a professional look at the tax implications of any terms you include in or changes you make to your estate plan in Minnesota. The documents that support your plan probably deal with a variety of laws, from the municipal level up to the federal level.
This diversity makes attention to detail important, especially when you are trying to minimize the tax burden on your estate. While there are many techniques and tools by which you can do this, trusts are among the most common.
There are many different types of trusts. Each has a situation in which it would be most effective. In order to secure funds for health care costs, you might want to implement one type of trust. In order to hold assets over which you wanted to maintain control, you would probably use a different type. To hold assets for eventual transfer to another party, you may use yet again another type.
To reduce tax burdens, you may want to transfer various types of assets into trust ownership format. This is mainly because the IRS regards trusts as separate entities. However, it is not a simple process. How and when you perform the transfer, as well as which trust you choose, is likely to have a profound effect on the effectiveness of this strategy.
It is doubly important to get a professional opinion on any trust you intend to form. As explained on the IRS website, there are some activities that could be considered abusive of the tax benefits of trusts. Because of the complexity of this issue, please seek specific advice based on the details of your case. This is only intended as a background information.