Residence trusts have a set term after which the property is transferred to a beneficiary. Following that, the Clintons could pay rent to the new owner to continue living in the house, which is another way to move assets outside of the estate.
For the asset to move completely outside the estate, the Clintons would have to outlive the term of the trust. Such trusts typically last for 10 to 15 years to maximize the discount applied to the property’s value.
Creating two separate trusts allows the Clintons to spread risk. They can set different lengths for each trust and if one of them dies, the other’s trust wouldn’t be affected.
Also in 2010, the Clintons created a life insurance trust. That can help defray the cost of estate taxes, Sloan said. They have had a separate life insurance trust since 1996, according to the disclosure records.
These moves are “pretty standard” planning for people who know they will be subject to the estate tax, said Ken Brier, an estate tax lawyer in Needham, Massachusetts.
“If you’re the Clintons and you live in a fishbowl,” he said, “you’re not going to push the envelope in doing cutting- edge planning.”