An A-B trust is a revocable living trust which divides into two trusts upon the death of the first spouse. This type of trust makes use of both the estate tax exemption ($3.5 million per person in 2009) and the marital deduction to make it so that no estate taxes are due upon the death of the first spouse. The B Trust is also known as the Bypass trust and it contains the amount of that years applicable exclusion amount. The A trust is the marital deduction trust which will typically contain both the surviving spouse's separate property and one half community property interests but also the residue of the deceased spouse's estate after the estate tax exemption has been utilized by the B trust. The use of an A-B trust ensures that both spouse's applicable exclusion amounts are effectively used, thereby doubling the amount of property which can pass to heirs free of Federal Estate Taxes.
A New Mexico Marital Deduction Trust, consisting of Trust A and Bypass Trust B, is a legal arrangement designed to help married couples in managing their assets and reducing potential estate taxes upon the death of the first spouse. Keywords: New Mexico, Marital Deduction Trust, Trust A, Bypass Trust B, estate taxes, assets, married couples, legal arrangement. Trust A, also called the Marital Deduction Trust, is a component of the New Mexico Marital Deduction Trust. It allows married couples to transfer their assets to the surviving spouse upon the death of the first spouse, without incurring estate taxes at that time. The surviving spouse becomes the beneficiary of Trust A and can utilize the income from the trust assets for their maintenance, health, education, and general welfare. The principal of Trust A remains intact and passes to the beneficiaries chosen by the deceased spouse upon the death of the surviving spouse. Bypass Trust B, also known as the Family Trust or Credit Shelter Trust, is the second component of the New Mexico Marital Deduction Trust. It is designed to maximize estate tax savings by utilizing the deceased spouse's estate tax exemption. Upon the death of the first spouse, a portion of the deceased spouse's assets, up to the estate tax exemption limit, is transferred to Bypass Trust B. The surviving spouse and other beneficiaries, typically the couple's children or descendants, can benefit from the income generated by these trust assets, while the principal of the trust remains protected from estate taxes. Upon the death of the surviving spouse, the trust assets in Bypass Trust B pass directly to the designated beneficiaries without being subject to further estate taxes. New Mexico Marital Deduction Trusts help individuals in New Mexico preserve their assets, minimize estate taxes, and provide for their surviving spouses and future generations. By utilizing Trust A and Bypass Trust B, couples can ensure the smooth transfer of assets and provide ongoing financial support for their loved ones. It is essential to consult with an experienced estate planning attorney to determine the best structure and the specific terms of Trust A and Bypass Trust B based on individual circumstances and goals. Other variations or subtypes of New Mexico Marital Deduction Trusts may exist, including specific provisions catering to unique family situations, charitable interests, or estate planning objectives. These customized trusts may bear different names or be structured differently, but their underlying purpose remains the same — to protect assets, minimize estate taxes, and provide for the surviving spouse and intended beneficiaries according to the wishes of the trust creator. In conclusion, a New Mexico Marital Deduction Trust, comprising Trust A and Bypass Trust B, is an effective estate planning tool for married couples seeking to minimize estate taxes and provide for their loved ones. Consulting an estate planning professional is crucial to ensure these trusts are tailored to specific needs and conform to the legal requirements of New Mexico.A New Mexico Marital Deduction Trust, consisting of Trust A and Bypass Trust B, is a legal arrangement designed to help married couples in managing their assets and reducing potential estate taxes upon the death of the first spouse. Keywords: New Mexico, Marital Deduction Trust, Trust A, Bypass Trust B, estate taxes, assets, married couples, legal arrangement. Trust A, also called the Marital Deduction Trust, is a component of the New Mexico Marital Deduction Trust. It allows married couples to transfer their assets to the surviving spouse upon the death of the first spouse, without incurring estate taxes at that time. The surviving spouse becomes the beneficiary of Trust A and can utilize the income from the trust assets for their maintenance, health, education, and general welfare. The principal of Trust A remains intact and passes to the beneficiaries chosen by the deceased spouse upon the death of the surviving spouse. Bypass Trust B, also known as the Family Trust or Credit Shelter Trust, is the second component of the New Mexico Marital Deduction Trust. It is designed to maximize estate tax savings by utilizing the deceased spouse's estate tax exemption. Upon the death of the first spouse, a portion of the deceased spouse's assets, up to the estate tax exemption limit, is transferred to Bypass Trust B. The surviving spouse and other beneficiaries, typically the couple's children or descendants, can benefit from the income generated by these trust assets, while the principal of the trust remains protected from estate taxes. Upon the death of the surviving spouse, the trust assets in Bypass Trust B pass directly to the designated beneficiaries without being subject to further estate taxes. New Mexico Marital Deduction Trusts help individuals in New Mexico preserve their assets, minimize estate taxes, and provide for their surviving spouses and future generations. By utilizing Trust A and Bypass Trust B, couples can ensure the smooth transfer of assets and provide ongoing financial support for their loved ones. It is essential to consult with an experienced estate planning attorney to determine the best structure and the specific terms of Trust A and Bypass Trust B based on individual circumstances and goals. Other variations or subtypes of New Mexico Marital Deduction Trusts may exist, including specific provisions catering to unique family situations, charitable interests, or estate planning objectives. These customized trusts may bear different names or be structured differently, but their underlying purpose remains the same — to protect assets, minimize estate taxes, and provide for the surviving spouse and intended beneficiaries according to the wishes of the trust creator. In conclusion, a New Mexico Marital Deduction Trust, comprising Trust A and Bypass Trust B, is an effective estate planning tool for married couples seeking to minimize estate taxes and provide for their loved ones. Consulting an estate planning professional is crucial to ensure these trusts are tailored to specific needs and conform to the legal requirements of New Mexico.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
