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.
A Houston 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 distribution of assets and property upon the death of a married individual in Houston, Texas, who has children. This specific type of will includes provisions to protect both the surviving spouse and children through the creation of different trusts. The first component of this will is the Credit Shelter Trust for Spouse. This trust is designed to maximize the use of the deceased person's estate tax exemption. It allows the assets and property to be passed to the surviving spouse without incurring estate taxes. The surviving spouse will have access to the income generated by the trust during their lifetime, with the principal remaining intact until their passing. The second component of the will is the Trust for Children, also known as the Marital Trust. This trust is established for the benefit of the children. It ensures that they receive a share of the deceased person's assets and property while providing some level of financial protection. The trust can be structured to provide the children with distributions for their education, healthcare, and general support. It can also specify the conditions under which the children can access the principal funds, such as reaching a certain age or achieving specific milestones. There may be variations or different types of Houston 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, depending on the specific circumstances and preferences of the individual. These variations could include different provisions for the distribution of assets, such as the percentage of assets allocated to each trust. Additionally, the will may include specific instructions for trustees, such as selecting individuals or financial institutions to manage the trusts on behalf of the beneficiaries. Overall, a Houston 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 comprehensive estate planning tool that ensures the surviving spouse and children are taken care of while maximizing tax benefits. It allows for the smooth transfer of assets and provides protection for the family's financial future.A Houston 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 distribution of assets and property upon the death of a married individual in Houston, Texas, who has children. This specific type of will includes provisions to protect both the surviving spouse and children through the creation of different trusts. The first component of this will is the Credit Shelter Trust for Spouse. This trust is designed to maximize the use of the deceased person's estate tax exemption. It allows the assets and property to be passed to the surviving spouse without incurring estate taxes. The surviving spouse will have access to the income generated by the trust during their lifetime, with the principal remaining intact until their passing. The second component of the will is the Trust for Children, also known as the Marital Trust. This trust is established for the benefit of the children. It ensures that they receive a share of the deceased person's assets and property while providing some level of financial protection. The trust can be structured to provide the children with distributions for their education, healthcare, and general support. It can also specify the conditions under which the children can access the principal funds, such as reaching a certain age or achieving specific milestones. There may be variations or different types of Houston 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, depending on the specific circumstances and preferences of the individual. These variations could include different provisions for the distribution of assets, such as the percentage of assets allocated to each trust. Additionally, the will may include specific instructions for trustees, such as selecting individuals or financial institutions to manage the trusts on behalf of the beneficiaries. Overall, a Houston 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 comprehensive estate planning tool that ensures the surviving spouse and children are taken care of while maximizing tax benefits. It allows for the smooth transfer of assets and provides protection for the family's financial future.
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.
