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 San Antonio 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 specific provisions regarding the distribution of assets and property after the death of a married individual residing in San Antonio, Texas. This type of will includes provisions tailored to the unique circumstances of married individuals with children, ensuring their spouse and children are provided for according to their wishes. The primary purpose of this will is to establish a Credit Shelter Trust for the spouse, also known as a Family Trust or Bypass Trust. This trust allows the spouse to have access to the income generated from the assets held within the trust, while also providing creditor protection and estate tax planning benefits. It ensures that the spouse is financially supported during their lifetime, even in the event of the other spouse's death. Additionally, this will include a Trust for Children, also known as a Descendant's Trust or Children's Trust. This trust is created to protect and manage the assets designated for the children of the deceased individual until they reach a certain age or milestone as specified in the will. It safeguards the assets from being misused or squandered and ensures that the children are provided for throughout their lives. The San Antonio 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 further specify the terms and conditions of each trust, such as: 1. Distribution Age: The age at which the children will have complete control and authority over the assets held in their trust. This age is often set after they reach adulthood but can be tailored to specific circumstances. 2. Trustee: The person or entity responsible for managing and distributing the assets within the trust. This can be an individual trusted by the deceased, a family member, a professional trustee, or a combination thereof. 3. Income and Principal Distributions: The guidelines for distributing income and principal from the trust to the spouse and children. This ensures that both parties receive necessary financial support while maintaining the longevity and growth of the trust assets. 4. Specific Bequests: Any specific gifts or assets designated for certain beneficiaries, such as sentimental items, real estate, or other valuable possessions. It's important to consult a qualified estate planning attorney to ensure that the San Antonio 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 constructed properly and aligns with individual goals, needs, and legal requirements.The San Antonio 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 specific provisions regarding the distribution of assets and property after the death of a married individual residing in San Antonio, Texas. This type of will includes provisions tailored to the unique circumstances of married individuals with children, ensuring their spouse and children are provided for according to their wishes. The primary purpose of this will is to establish a Credit Shelter Trust for the spouse, also known as a Family Trust or Bypass Trust. This trust allows the spouse to have access to the income generated from the assets held within the trust, while also providing creditor protection and estate tax planning benefits. It ensures that the spouse is financially supported during their lifetime, even in the event of the other spouse's death. Additionally, this will include a Trust for Children, also known as a Descendant's Trust or Children's Trust. This trust is created to protect and manage the assets designated for the children of the deceased individual until they reach a certain age or milestone as specified in the will. It safeguards the assets from being misused or squandered and ensures that the children are provided for throughout their lives. The San Antonio 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 further specify the terms and conditions of each trust, such as: 1. Distribution Age: The age at which the children will have complete control and authority over the assets held in their trust. This age is often set after they reach adulthood but can be tailored to specific circumstances. 2. Trustee: The person or entity responsible for managing and distributing the assets within the trust. This can be an individual trusted by the deceased, a family member, a professional trustee, or a combination thereof. 3. Income and Principal Distributions: The guidelines for distributing income and principal from the trust to the spouse and children. This ensures that both parties receive necessary financial support while maintaining the longevity and growth of the trust assets. 4. Specific Bequests: Any specific gifts or assets designated for certain beneficiaries, such as sentimental items, real estate, or other valuable possessions. It's important to consult a qualified estate planning attorney to ensure that the San Antonio 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 constructed properly and aligns with individual goals, needs, and legal requirements.
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.
