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 McKinney 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 document designed to protect the assets and financial security of a married person with children in the state of Texas. This will ensure that your spouse and children are adequately provided for in the event of your passing, while also utilizing tax planning strategies to maximize the value of your estate. The primary feature of this McKinney Married Person's Will is the inclusion of a Credit Shelter Trust for the spouse. This trust, also known as a bypass or A/B trust, allows the deceased person's share of the estate to pass into a trust for the surviving spouse, effectively sheltering it from estate taxes. The surviving spouse has access to the income generated by the trust, while the principal remains protected and preserved for the benefit of the children upon the spouse's death. Additionally, this will include a Trust for Children, often referred to as a descendant's trust. This trust is established to safeguard the children's inheritance until they reach a certain age or milestone, as specified in the will. It can also serve as a means of managing and distributing assets for the benefit of minor children, ensuring that they are cared for until they are capable of managing their inheritance responsibly. Different variations or types of McKinney 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 may include specific provisions tailored to individual circumstances. Some potential variations could include designating alternate or successor trustees, specifying the terms and conditions for the distribution of assets from the trust, or incorporating provisions for special needs children. Ultimately, the McKinney Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust provides a comprehensive estate plan that offers financial security and peace of mind for married individuals in the state of Texas. By utilizing these trusts, you can ensure that your spouse and children are taken care of and that your assets are preserved and distributed according to your wishes.The McKinney 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 document designed to protect the assets and financial security of a married person with children in the state of Texas. This will ensure that your spouse and children are adequately provided for in the event of your passing, while also utilizing tax planning strategies to maximize the value of your estate. The primary feature of this McKinney Married Person's Will is the inclusion of a Credit Shelter Trust for the spouse. This trust, also known as a bypass or A/B trust, allows the deceased person's share of the estate to pass into a trust for the surviving spouse, effectively sheltering it from estate taxes. The surviving spouse has access to the income generated by the trust, while the principal remains protected and preserved for the benefit of the children upon the spouse's death. Additionally, this will include a Trust for Children, often referred to as a descendant's trust. This trust is established to safeguard the children's inheritance until they reach a certain age or milestone, as specified in the will. It can also serve as a means of managing and distributing assets for the benefit of minor children, ensuring that they are cared for until they are capable of managing their inheritance responsibly. Different variations or types of McKinney 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 may include specific provisions tailored to individual circumstances. Some potential variations could include designating alternate or successor trustees, specifying the terms and conditions for the distribution of assets from the trust, or incorporating provisions for special needs children. Ultimately, the McKinney Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust provides a comprehensive estate plan that offers financial security and peace of mind for married individuals in the state of Texas. By utilizing these trusts, you can ensure that your spouse and children are taken care of and that your assets are preserved and distributed according to your wishes.
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.
