Federal Gift, Estate and Generation Skipping taxes have long been subject to a unified exemption. Transfers are cumulative. A gift tax return must be filed reporting the cumulative transfers and exemption consumed from prior and the current year returns. Tax is imposed on the amount which exceeds the exemption. There are exceptions, such as the annual gift tax exclusion (presently $15,000), but that's the gist of it.
The Supreme Court of the United States (SCOTUS) has agreed to hear a case that questions the ability of a state to tax trust income when the trust is located in another state.
Trusts are valuable estate planning tools that can be utilized to any number of ends. Connecticut residents can use trusts to minimize estate taxes, avoid probate and more easily pass assets to heirs. While people usually understand that selecting the right type of trust and funding it correctly is important, they often forget about what it takes to name the right trustee.