Do I Need a Trust to Save Taxes?
Kurt R. BachmanKurt R. BachmanIt depends. In Indiana, most people do NOT need a Trust to save taxes. The Indiana inheritance tax has been repealed for several years. Also, there will be no federal estate tax due upon death if the value of your estate is below the current (2026) federal estate and gift tax exemption amount of $15M per individual. This allows a married couple in Indiana to effectively pass during their lifetimes or at death up to $30M estate and inheritance tax free. In fact, some Trusts will cause an increase in taxes if not structured properly. This is because federal (and in some cases) state income taxes are higher for income within a Trust. As an example, current (2026) federal income tax rates for individuals generally do not reach the highest bracket (37%) until after taxable income of over $751,600.00 for those filing married and over $626,350.00 for unmarried individuals. However, the federal income tax rate jumps to 37% for a Trust only after $15,650.00 in taxable income. This is a huge effective tax rate increase. Trusts still serve clients well in many other respects (e.g. long-term care and asset preservation planning, extremely high net worth individuals, etc.) but generally do not save taxes for the typical client.
