Why did some married couples use to have separate living trusts?

Attorney Tom Olsen: -married couple that came to see me last week, not only did they have one 70-page trust, they had two 70-page trust, a his and a hers. Of course, they're wondering, "Tom, why do we have separate trusts?" and so I broke it down for them because when they did these trusts in 1993, I think it was, people were using living trust for two purposes. Purpose number one is to avoid probate. We're still using living trust for that purpose, avoid probate. The second purpose they were using it for was to minimize estate taxes, also known as death taxes, also known as inheritance taxes.

Attorney Holley Knapik: Okay.

Attorney Tom Olsen: Back in 1993-- I'm going to make up a number here, but we're somewhere in the ballpark. In 1993, every individual could pass up to $300,000 free of estate taxes, also known as debt taxes, also known as inheritance taxes. A married couple with proper planning could double that to $600,000. That proper planning required that they have separate trusts, that they literally divide their assets in two, half the assets are owned by wife's trust, half the assets are owned by husband's trust. That's why they had separate living trusts. These days, as far as estate taxes are concerned, also known as debt taxes, also known as inheritance taxes, it's much more liberal IRS policy.

Attorney Holley Knapik: It is. I think currently we are looking at-- a single person can pass up to-- Is it $11 million?

Attorney Tom Olsen: $11 million

Attorney Holley Knapik: And a married couple up to $22 million.

Attorney Tom Olsen: Yes. In the past, that $22 million does not require that you have separate trusts anymore. You may be using a trust for the purpose of avoiding probate, but you're no longer using trust to get your $22 million exemption as a married couple. Hey, folks, my name is Tom Olsen. The name of the show is Olsen On Law. We're going to take a break. We'll be back in just a few minutes.