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 Irving 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 specifically tailored for married individuals residing in Texas who have children. This comprehensive will ensures the protection and distribution of assets for the benefit of the surviving spouse and children, while taking advantage of potential tax benefits through the utilization of trusts. The primary objective of the Irving Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children is to provide financial security and asset preservation for the surviving spouse. By creating a Credit Shelter Trust, also known as a bypass trust or A-B trust, the surviving spouse is able to access the income generated by the assets held in the trust, while preserving the principal for the beneficiaries, typically the children. This trust effectively minimizes estate taxes, as the assets transferred to the trust are excluded from the surviving spouse's taxable estate upon their death. Furthermore, the Irving Married Person's Will incorporates a Trust for Children, ensuring that the children receive their fair share of the estate. This trust acts as a safeguard, protecting the children's inheritance from potential creditors, divorce, or mismanagement. The assets held in the trust are managed by a designated trustee, who follows specific instructions outlined in the will regarding the distribution and use of the trust funds. It's important to note that there may be variations or alternative options available within the Irving 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. These may include provisions for specific assets, such as real estate or business interests, and alternative beneficiary designations. However, the core elements typically remain unchanged, focusing on the establishment of the Credit Shelter Trust for Spouse and the Trust for Children, ensuring the efficient transfer of assets and wealth preservation for the family. In conclusion, the Irving 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 provides a comprehensive estate planning solution for married individuals in Texas, incorporating tax-efficient strategies to protect and distribute assets to the surviving spouse and children. By utilizing trusts, this will offer peace of mind, ensuring that the designated beneficiaries are well taken care of while minimizing tax burdens.The Irving 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 specifically tailored for married individuals residing in Texas who have children. This comprehensive will ensures the protection and distribution of assets for the benefit of the surviving spouse and children, while taking advantage of potential tax benefits through the utilization of trusts. The primary objective of the Irving Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children is to provide financial security and asset preservation for the surviving spouse. By creating a Credit Shelter Trust, also known as a bypass trust or A-B trust, the surviving spouse is able to access the income generated by the assets held in the trust, while preserving the principal for the beneficiaries, typically the children. This trust effectively minimizes estate taxes, as the assets transferred to the trust are excluded from the surviving spouse's taxable estate upon their death. Furthermore, the Irving Married Person's Will incorporates a Trust for Children, ensuring that the children receive their fair share of the estate. This trust acts as a safeguard, protecting the children's inheritance from potential creditors, divorce, or mismanagement. The assets held in the trust are managed by a designated trustee, who follows specific instructions outlined in the will regarding the distribution and use of the trust funds. It's important to note that there may be variations or alternative options available within the Irving 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. These may include provisions for specific assets, such as real estate or business interests, and alternative beneficiary designations. However, the core elements typically remain unchanged, focusing on the establishment of the Credit Shelter Trust for Spouse and the Trust for Children, ensuring the efficient transfer of assets and wealth preservation for the family. In conclusion, the Irving 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 provides a comprehensive estate planning solution for married individuals in Texas, incorporating tax-efficient strategies to protect and distribute assets to the surviving spouse and children. By utilizing trusts, this will offer peace of mind, ensuring that the designated beneficiaries are well taken care of while minimizing tax burdens.
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.
