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 Lewisville 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 and welfare of a married individual residing in Lewisville, Texas. This comprehensive estate planning tool ensures that both the spouse and children are adequately provided for after the individual's passing. Keywords: Lewisville, married person's will, State of Texas, children, credit shelter trust, spouse, trust for children, marital trust In the State of Texas, there may be variations or additional options available for the Lewisville Married Person's Will with Credit Shelter Trusts for Spouse and Children. Some different types are: 1. Revocable Living Trust: This is an option for married individuals who wish to have more flexibility and control over their assets during their lifetime. It allows the granter to transfer assets into a trust while still maintaining control over them, and upon their passing, the assets can be distributed according to the instructions in the trust, including the establishment of credit shelter trusts for the spouse and children. 2. Irrevocable Life Insurance Trust (IIT): This type of trust is specifically designed to hold life insurance policies outside the estate, thus minimizing estate taxes. By creating an IIT, married individuals can ensure that the proceeds from a life insurance policy benefit their spouse and children while also protecting them from potential tax liabilities. 3. Qualified Terminal Interest Property Trust (TIP): The TIP trust allows a married individual to provide for their current spouse while still controlling the ultimate distribution of assets to their children from a previous marriage or relationship. 4. Generation-Skipping Trust: This type of trust is suitable for individuals who wish to provide for their children while also minimizing estate taxes when transferring wealth to grandchildren or subsequent generations. The Lewisville 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 and customizable document that ensures the smooth transfer of assets to the surviving spouse and children while minimizing estate taxes. By utilizing various trust options, married individuals can create a tailored estate plan that meets their specific needs and protects their loved ones' financial future.The Lewisville 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 and welfare of a married individual residing in Lewisville, Texas. This comprehensive estate planning tool ensures that both the spouse and children are adequately provided for after the individual's passing. Keywords: Lewisville, married person's will, State of Texas, children, credit shelter trust, spouse, trust for children, marital trust In the State of Texas, there may be variations or additional options available for the Lewisville Married Person's Will with Credit Shelter Trusts for Spouse and Children. Some different types are: 1. Revocable Living Trust: This is an option for married individuals who wish to have more flexibility and control over their assets during their lifetime. It allows the granter to transfer assets into a trust while still maintaining control over them, and upon their passing, the assets can be distributed according to the instructions in the trust, including the establishment of credit shelter trusts for the spouse and children. 2. Irrevocable Life Insurance Trust (IIT): This type of trust is specifically designed to hold life insurance policies outside the estate, thus minimizing estate taxes. By creating an IIT, married individuals can ensure that the proceeds from a life insurance policy benefit their spouse and children while also protecting them from potential tax liabilities. 3. Qualified Terminal Interest Property Trust (TIP): The TIP trust allows a married individual to provide for their current spouse while still controlling the ultimate distribution of assets to their children from a previous marriage or relationship. 4. Generation-Skipping Trust: This type of trust is suitable for individuals who wish to provide for their children while also minimizing estate taxes when transferring wealth to grandchildren or subsequent generations. The Lewisville 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 and customizable document that ensures the smooth transfer of assets to the surviving spouse and children while minimizing estate taxes. By utilizing various trust options, married individuals can create a tailored estate plan that meets their specific needs and protects their loved ones' 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.
