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 Harris 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 designed to protect the assets of married individuals in Texas who have children. This comprehensive estate planning tool includes specific provisions and trusts to ensure that both the spouse and children are taken care of in the event of the testator's passing. The primary objective of the Harris Married Person's Will is to provide financial security and asset protection for the surviving spouse, while also guaranteeing support for the children. By utilizing a Credit Shelter Trust for the surviving spouse and a separate Trust for Children — Marital Trust, this wilmaximizees tax benefits and ensures proper distribution of the estate. The Credit Shelter Trust, also known as a bypass trust or a family trust, is designed to take full advantage of the federal estate tax exemption by sheltering a portion of the deceased spouse's assets from estate taxes upon their death. The surviving spouse is entitled to receive income distributions from this trust, which can greatly benefit their financial stability while also preserving the principal assets for the children. The Trust for Children — Marital Trust, on the other hand, is specifically allocated to provide for the financial needs of the children. This trust can be used to cover expenses such as education, healthcare, and general support until the children reach a certain age or milestone specified by the testator. By creating this separate trust, the parents can ensure that their children's needs are met, even if the surviving spouse were to remarry or face financial turbulence. Creating a Harris 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 requires careful consideration of various factors, such as the size of the estate, the financial goals of the testator, and the specific needs of the surviving spouse and children. Consulting with an experienced estate planning attorney is imperative to customize the will according to the individual's circumstances and to ensure that all legal requirements are met. By employing the right tools and utilizing the appropriate trusts, individuals can ensure the seamless transfer of assets while minimizing the burden of taxes and protecting the financial wellbeing of their loved ones. The Harris 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 an efficient and effective solution for married individuals in Texas seeking to secure the financial future of their spouse and children.The Harris 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 designed to protect the assets of married individuals in Texas who have children. This comprehensive estate planning tool includes specific provisions and trusts to ensure that both the spouse and children are taken care of in the event of the testator's passing. The primary objective of the Harris Married Person's Will is to provide financial security and asset protection for the surviving spouse, while also guaranteeing support for the children. By utilizing a Credit Shelter Trust for the surviving spouse and a separate Trust for Children — Marital Trust, this wilmaximizees tax benefits and ensures proper distribution of the estate. The Credit Shelter Trust, also known as a bypass trust or a family trust, is designed to take full advantage of the federal estate tax exemption by sheltering a portion of the deceased spouse's assets from estate taxes upon their death. The surviving spouse is entitled to receive income distributions from this trust, which can greatly benefit their financial stability while also preserving the principal assets for the children. The Trust for Children — Marital Trust, on the other hand, is specifically allocated to provide for the financial needs of the children. This trust can be used to cover expenses such as education, healthcare, and general support until the children reach a certain age or milestone specified by the testator. By creating this separate trust, the parents can ensure that their children's needs are met, even if the surviving spouse were to remarry or face financial turbulence. Creating a Harris 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 requires careful consideration of various factors, such as the size of the estate, the financial goals of the testator, and the specific needs of the surviving spouse and children. Consulting with an experienced estate planning attorney is imperative to customize the will according to the individual's circumstances and to ensure that all legal requirements are met. By employing the right tools and utilizing the appropriate trusts, individuals can ensure the seamless transfer of assets while minimizing the burden of taxes and protecting the financial wellbeing of their loved ones. The Harris 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 an efficient and effective solution for married individuals in Texas seeking to secure the financial future of their spouse and children.
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.
