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.
Travis 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 Keywords: Travis Married Person's Will, State of Texas, children, Credit Shelter Trust, Spouse, Trust for Children, Marital Trust. Description: A Travis 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 legally binding document that provides instructions on the distribution of assets and the care of minor children in the event of the testator's death. This type of will is specifically designed for married individuals residing in the state of Texas who have children and want to ensure the financial security of their loved ones. The main components of this will are the Credit Shelter Trust for the Spouse and the Trust for Children, also known as the Marital Trust. These trusts play a crucial role in preserving the assets and minimizing estate taxes, while ensuring the well-being of the surviving spouse and children. The Credit Shelter Trust is established to hold a portion of the deceased individual's assets, up to the estate tax exemption limit, which is currently set at $11.7 million (subject to change). By utilizing this trust, the assets placed within it are protected from estate taxes, allowing them to benefit the surviving spouse and children without incurring additional tax liabilities. The Trust for Children, also known as the Marital Trust, is designed to provide for the financial needs of the children until they reach a specified age or milestone, such as completing their education or turning a certain age. This trust allows for the management and distribution of assets to support the children's upbringing, education, healthcare, or any other specified needs. It is important to note that there might be different variations of the Travis Married Person's Will for the State of Texas with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust, as individuals may have different preferences and circumstances. These variations can include specific provisions for the distribution of assets, appointment of guardians, establishment of educational trusts, or charitable giving. To ensure that this will accurately reflect the intentions and desired outcomes of the testator, it is advisable to consult an experienced estate planning attorney who can provide personalized advice and guidance based on individual circumstances. In conclusion, the Travis Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust is an important estate planning document for married individuals in the State of Texas with children. It helps protect assets, minimize tax liabilities, and provide for the financial well-being of the surviving spouse and children.Travis 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 Keywords: Travis Married Person's Will, State of Texas, children, Credit Shelter Trust, Spouse, Trust for Children, Marital Trust. Description: A Travis 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 legally binding document that provides instructions on the distribution of assets and the care of minor children in the event of the testator's death. This type of will is specifically designed for married individuals residing in the state of Texas who have children and want to ensure the financial security of their loved ones. The main components of this will are the Credit Shelter Trust for the Spouse and the Trust for Children, also known as the Marital Trust. These trusts play a crucial role in preserving the assets and minimizing estate taxes, while ensuring the well-being of the surviving spouse and children. The Credit Shelter Trust is established to hold a portion of the deceased individual's assets, up to the estate tax exemption limit, which is currently set at $11.7 million (subject to change). By utilizing this trust, the assets placed within it are protected from estate taxes, allowing them to benefit the surviving spouse and children without incurring additional tax liabilities. The Trust for Children, also known as the Marital Trust, is designed to provide for the financial needs of the children until they reach a specified age or milestone, such as completing their education or turning a certain age. This trust allows for the management and distribution of assets to support the children's upbringing, education, healthcare, or any other specified needs. It is important to note that there might be different variations of the Travis Married Person's Will for the State of Texas with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust, as individuals may have different preferences and circumstances. These variations can include specific provisions for the distribution of assets, appointment of guardians, establishment of educational trusts, or charitable giving. To ensure that this will accurately reflect the intentions and desired outcomes of the testator, it is advisable to consult an experienced estate planning attorney who can provide personalized advice and guidance based on individual circumstances. In conclusion, the Travis Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust is an important estate planning document for married individuals in the State of Texas with children. It helps protect assets, minimize tax liabilities, and provide for the financial well-being of the surviving spouse and children.
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.
