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 College Station 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 outlines the specific arrangements and instructions for division of assets and distribution of wealth upon the demise of the married person. This will provide important protection for both the surviving spouse and the children. It is essential to understand the key components and variations of this type of will to ensure effective estate planning. The primary purpose of the College Station Married Person's Will is to establish a Credit Shelter Trust (also known as a bypass trust or family trust) for the spouse and a Trust for Children (also known as a testamentary trust or child trust). These specific trusts protect the assets and provide financial support for the surviving spouse and children, while minimizing estate taxes. By implementing this type of will, married individuals can ensure that their wealth is managed and distributed according to their wishes, even after their passing. The Credit Shelter Trust is designed to shelter a portion of the deceased person's assets to bypass or avoid estate taxes, also known as the unified credit or estate tax exemption. This trust holds assets for the benefit of the surviving spouse, providing them with income or support during their lifetime, while preserving the remaining assets for future generations. The surviving spouse typically has access to income generated by the trust and often has limited access to the principal. Upon the spouse's death, the remaining assets are typically passed on to the children or other beneficiaries as per the deceased person's instructions. In addition to the Credit Shelter Trust, the College Station Married Person's Will also establishes a Trust for Children. This trust ensures that the children receive their fair share of the estate while being governed by specific guidelines set forth by the deceased person. The trust can designate a trustee who will manage the assets and distribution of wealth to the children until they reach a certain age or achieve certain milestones. This enables the children's financial support and protection until they are deemed capable of managing the assets themselves. There are various types or variations of the College Station 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, including: 1. Irrevocable Credit Shelter Trust: This variation establishes an irrevocable trust for the surviving spouse's benefit, ensuring that the assets are protected from estate taxes. 2. Revocable Credit Shelter Trust: This type of trust allows for modifications and changes to be made during the lifetime of the married person, providing more flexibility in managing the assets. 3. Testamentary Credit Shelter Trust: This trust is established upon the death of the married person and is included in their will. It ensures that the assets are protected for the surviving spouse while allowing for distribution to the children or other beneficiaries upon the spouse's death. 4. Lifetime Trust for Children: This variation establishes a trust for the children during the lifetime of the married person or both spouses, providing benefits while they are alive and possibly continuing after their passing. By utilizing the College Station 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, individuals can protect their assets, minimize estate taxes, and ensure the financial security of their loved ones. It is crucial to consult with an experienced estate planning attorney to understand the appropriate options and tailor the will to meet specific needs and circumstances.The College Station 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 outlines the specific arrangements and instructions for division of assets and distribution of wealth upon the demise of the married person. This will provide important protection for both the surviving spouse and the children. It is essential to understand the key components and variations of this type of will to ensure effective estate planning. The primary purpose of the College Station Married Person's Will is to establish a Credit Shelter Trust (also known as a bypass trust or family trust) for the spouse and a Trust for Children (also known as a testamentary trust or child trust). These specific trusts protect the assets and provide financial support for the surviving spouse and children, while minimizing estate taxes. By implementing this type of will, married individuals can ensure that their wealth is managed and distributed according to their wishes, even after their passing. The Credit Shelter Trust is designed to shelter a portion of the deceased person's assets to bypass or avoid estate taxes, also known as the unified credit or estate tax exemption. This trust holds assets for the benefit of the surviving spouse, providing them with income or support during their lifetime, while preserving the remaining assets for future generations. The surviving spouse typically has access to income generated by the trust and often has limited access to the principal. Upon the spouse's death, the remaining assets are typically passed on to the children or other beneficiaries as per the deceased person's instructions. In addition to the Credit Shelter Trust, the College Station Married Person's Will also establishes a Trust for Children. This trust ensures that the children receive their fair share of the estate while being governed by specific guidelines set forth by the deceased person. The trust can designate a trustee who will manage the assets and distribution of wealth to the children until they reach a certain age or achieve certain milestones. This enables the children's financial support and protection until they are deemed capable of managing the assets themselves. There are various types or variations of the College Station 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, including: 1. Irrevocable Credit Shelter Trust: This variation establishes an irrevocable trust for the surviving spouse's benefit, ensuring that the assets are protected from estate taxes. 2. Revocable Credit Shelter Trust: This type of trust allows for modifications and changes to be made during the lifetime of the married person, providing more flexibility in managing the assets. 3. Testamentary Credit Shelter Trust: This trust is established upon the death of the married person and is included in their will. It ensures that the assets are protected for the surviving spouse while allowing for distribution to the children or other beneficiaries upon the spouse's death. 4. Lifetime Trust for Children: This variation establishes a trust for the children during the lifetime of the married person or both spouses, providing benefits while they are alive and possibly continuing after their passing. By utilizing the College Station 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, individuals can protect their assets, minimize estate taxes, and ensure the financial security of their loved ones. It is crucial to consult with an experienced estate planning attorney to understand the appropriate options and tailor the will to meet specific needs and circumstances.
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.
