In order to effectively utilize a sweetheart trust to manage your estate, you need to know what these are. A sweetheart trust gets its name from the increased level of control afforded to the surviving spouse.

While both you and your spouse are alive, you each have the option to make changes to your portion of the trust. Mutual agreement allows you to amend the trust or dissolve it before death. Once you or your spouse passes away, control over the trust reverts solely to the surviving spouse.

Assets contained within the trust remain in that same revocable living trust for the life span of the surviving spouse and are then transferred to the appropriate beneficiaries upon the surviving spouse's death.

Once you understand how a sweetheart trust differs from other types of revocable living trusts, you can begin to see the benefits that you will enjoy when using a sweetheart trust to plan your estate. The structure of a sweetheart trust is simple and straightforward, making the trust easy to understand and oversee.

Like all revocable living trusts, a sweetheart trust allows you to keep your estate out of probate following your death. Your spouse will not be required to draft complex paperwork allowing for the division of the trust after your death, and no separate income tax return will need to be filed since the structure of the sweetheart trust remains intact as long as you or your spouse are alive.

The simplicity of a sweetheart trust makes these types of revocable living trusts a great option for individuals who want to enjoy the same benefits associated with joint ownership of real property while avoiding the complications of probate court.

The desire to avoid hefty estate taxes has been one of the factors driving people to use trusts as part of the estate planning process.

While complex trust structures might have been required to minimize tax burdens in the past, recent changes to estate tax laws have made the simple structure of a sweetheart trust more appealing. The new unified tax credit amount for year 2018 through year 2025 is over $11 million, meaning that you can pass on just over $11 million in cash and assets without incurring estate taxes.



Portability provisions also have been introduced, allowing married couples to double their unified credit amount. This provision gives you and your spouse the ability to leave a significant amount of money in a simple sweetheart trust without worrying about the estate taxes that will have to be paid.



There are many estate planning tools available to individuals looking to avoid probate and plan for the dispersal of their assets. Contact Kisner Law Firm for a consultation to discuss your unique situation. An experienced attorney will be able to help you decide if a sweetheart trust is equipped to meet your estate planning goals.