The phrase "credit shelter trust" trust refers to a trust that is designed to make maximum use of the unified credit for estate taxes -- which is also known as the lifetime exemption. Each individual is allowed a once-in-a-lifetime exemption from estate and gift taxes. However, the exemption is computed as a credit against the estate and gift tax that is sufficient to offset the tax on an estate of a specified size. A credit shelter trust is designed to make maximum use of the unified credit for estate taxes. Each individual is allowed a once-in-a-lifetime credit from estate and gift taxes. For 2009 the exempt amount is 3.5 million. By the year 2010 the inheritance tax is eliminated but if congress does not make the elimination permanent in the following year the tax will return and the exempt amount will be $1.0 million. Since it is any one's guess what congress will do, planning to maximize the credit is still the smartest estate plan for married couples to utilize.
The parties must split there assets so that roughly 1/2 half of the assets are held by Spouse One and 1/2 of the assets are held by Spouse Two. Each spouse then provides by will or living trust that upon their death the amount of their assets up to the exemption amount are to be held in a trust known as the credit shelter trust. The trust typically provides that the surviving spouse has entitlement to the income and to the principal provided that there are "ascertainable standards" established in accordance with IRS law for the trustee to distribute principal to the surviving spouse.
When the first spouse dies the credit shelter trust is exempt from tax. When the surviving spouse dies the surviving spouse's estate up to the exempt amount is also exempt from tax. This way the parties can exempt twice as much of their combined estates from taxation and save their loved ones substantial tax savings without losing beneficial use and enjoyment of their assets during their lifetimes.
The Abilene Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust is a legal document that allows married individuals in Abilene, Texas, to establish a comprehensive estate plan that ensures their assets are distributed according to their wishes while providing for their spouse and children after their demise. This type of will is specifically designed for married individuals residing in Abilene, Texas, who have children and desire to protect their assets and provide financial security for their family. The will incorporates two essential trusts: the Credit Shelter Trust for the spouse and the Trust for Children — Marital Trust. The Credit Shelter Trust is established to minimize estate taxes and protect the spouse's share of the assets. It allows for a certain amount of the deceased individual's estate to pass into the trust, which is not subject to estate taxes upon their death. The surviving spouse receives income from the trust during their lifetime, ensuring their financial stability, while preserving the principal for the couple's children or other beneficiaries. The Trust for Children — Marital Trust is created to safeguard the interests of the children. This trust provides for the distribution of assets to the children upon the death of both parents or upon reaching a specified age. It ensures that the children's financial needs, such as education, healthcare, and general well-being, are met while still maintaining oversight and control over the inheritance. By utilizing the Abilene Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust, individuals can protect their assets from excessive taxation, provide financial security for their spouse, and secure their children's future. This comprehensive estate planning strategy is an essential component of responsible financial management and provides peace of mind during unforeseen circumstances. Other types of Abilene Married Person's Wills with various trust options may include: 1. Abilene Married Person's Will with a Revocable Living Trust: This type of will incorporates a revocable living trust that allows for greater flexibility in managing and distributing assets while avoiding the probate process. 2. Abilene Married Person's Will with a Special Needs Trust: If one or more of the children has special needs, this type of will establishes a trust specifically designed to provide for their long-term care without jeopardizing eligibility for government assistance programs. 3. Abilene Married Person's Will with a Charitable Remainder Trust: This type of will includes a trust that enables the individual to leave a portion of their estate to a charitable organization while still providing income to their spouse or other beneficiaries during their lifetime. Each type of Abilene Married Person's Will is tailored to meet specific needs and objectives, allowing individuals to customize their estate plan according to their unique circumstances. It is recommended to consult with a qualified attorney specializing in estate planning to determine the most suitable option for your particular situation.The Abilene Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust is a legal document that allows married individuals in Abilene, Texas, to establish a comprehensive estate plan that ensures their assets are distributed according to their wishes while providing for their spouse and children after their demise. This type of will is specifically designed for married individuals residing in Abilene, Texas, who have children and desire to protect their assets and provide financial security for their family. The will incorporates two essential trusts: the Credit Shelter Trust for the spouse and the Trust for Children — Marital Trust. The Credit Shelter Trust is established to minimize estate taxes and protect the spouse's share of the assets. It allows for a certain amount of the deceased individual's estate to pass into the trust, which is not subject to estate taxes upon their death. The surviving spouse receives income from the trust during their lifetime, ensuring their financial stability, while preserving the principal for the couple's children or other beneficiaries. The Trust for Children — Marital Trust is created to safeguard the interests of the children. This trust provides for the distribution of assets to the children upon the death of both parents or upon reaching a specified age. It ensures that the children's financial needs, such as education, healthcare, and general well-being, are met while still maintaining oversight and control over the inheritance. By utilizing the Abilene Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust, individuals can protect their assets from excessive taxation, provide financial security for their spouse, and secure their children's future. This comprehensive estate planning strategy is an essential component of responsible financial management and provides peace of mind during unforeseen circumstances. Other types of Abilene Married Person's Wills with various trust options may include: 1. Abilene Married Person's Will with a Revocable Living Trust: This type of will incorporates a revocable living trust that allows for greater flexibility in managing and distributing assets while avoiding the probate process. 2. Abilene Married Person's Will with a Special Needs Trust: If one or more of the children has special needs, this type of will establishes a trust specifically designed to provide for their long-term care without jeopardizing eligibility for government assistance programs. 3. Abilene Married Person's Will with a Charitable Remainder Trust: This type of will includes a trust that enables the individual to leave a portion of their estate to a charitable organization while still providing income to their spouse or other beneficiaries during their lifetime. Each type of Abilene Married Person's Will is tailored to meet specific needs and objectives, allowing individuals to customize their estate plan according to their unique circumstances. It is recommended to consult with a qualified attorney specializing in estate planning to determine the most suitable option for your particular situation.
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.
