so when we’re considering the tax

implications of establishing a trust

there’s income tax implications and then

there’s also a state and gift tax if we

take our typical revocable living trust

it has no income tax

ramifications nor does it accomplish any

estate or give tax changes but when we

get into irrevocable trusts for estate

tax savings for asset protection now we

are going to have income tax in the

state and gift tax issues to address now

we can design an irrevocable trust to be

income tax neutral it requires special

planning

and it frequently makes sense because

irrevocable trusts paid the top income

tax rates at very low levels for example

this year at about thirteen thousand

dollars a taxable income it will pay tax

at the top individual income tax rate

that a single person wouldn’t hit till

about two hundred and fifty thousand

dollars and then we have a state and

gift tax issues

if we want to make a transfer to a trust

a complete transfer for gift tax we have

to file gift tax returns in exchange

that asset is out of our state at death

and it can be untaxed for multiple

Generations