An A-B trust is a revocable living trust which divides into two trusts upon the death of the first spouse. This type of trust makes use of both the estate tax exemption ($3.5 million per person in 2009) and the marital deduction to make it so that no estate taxes are due upon the death of the first spouse. The B Trust is also known as the Bypass trust and it contains the amount of that years applicable exclusion amount. The A trust is the marital deduction trust which will typically contain both the surviving spouse's separate property and one half community property interests but also the residue of the deceased spouse's estate after the estate tax exemption has been utilized by the B trust. The use of an A-B trust ensures that both spouse's applicable exclusion amounts are effectively used, thereby doubling the amount of property which can pass to heirs free of Federal Estate Taxes.
Cook Illinois Marital Deduction Trust — Trust A and Bypass Trust B are two separate trust structures commonly used in estate planning. These trusts are utilized to take advantage of the marital deduction for estate tax purposes, allowing assets to be transferred between spouses without incurring tax liability. Trust A, also known as the Marital Deduction Trust, is designed to qualify for the unlimited marital deduction. This means that upon the death of one spouse, the assets held in Trust A can be transferred to the surviving spouse without being subject to estate tax. The surviving spouse becomes the beneficiary of Trust A and has control over the trust assets during their lifetime. However, upon the death of the surviving spouse, any remaining assets in Trust A will be included in their taxable estate. Bypass Trust B, also referred to as the Credit Shelter Trust, is structured to take advantage of the deceased spouse's available estate tax exemption. When the first spouse passes away, a portion of their assets, up to the estate tax exemption amount, is transferred to Trust B. This amount is then excluded from the surviving spouse's taxable estate, potentially reducing the overall estate tax liability upon their death. Trust B typically provides income to the surviving spouse and/or other named beneficiaries, while preserving the trust principal for future generations. It is essential to note that Cook Illinois Marital Deduction Trusts can come in different variations, depending on the specific estate planning goals and needs of the individuals involved. Some variations include Qualified Terminable Interest Property (TIP) Trusts, which provide income to the surviving spouse while ensuring the ultimate distribution to other beneficiaries, such as children from a previous marriage. Another type is the General Power of Appointment (GPA) Trust, which grants the surviving spouse the ability to appoint trust assets among various beneficiaries, offering flexibility and control. In summary, Cook Illinois Marital Deduction Trust — Trust A and Bypass Trust B are two essential components of estate planning, allowing couples to maximize the marital deduction and minimize estate tax liability. The specific type and structure of these trusts can vary based on each individual's circumstances and objectives, ensuring the most favorable outcomes for the surviving spouse and future generations.Cook Illinois Marital Deduction Trust — Trust A and Bypass Trust B are two separate trust structures commonly used in estate planning. These trusts are utilized to take advantage of the marital deduction for estate tax purposes, allowing assets to be transferred between spouses without incurring tax liability. Trust A, also known as the Marital Deduction Trust, is designed to qualify for the unlimited marital deduction. This means that upon the death of one spouse, the assets held in Trust A can be transferred to the surviving spouse without being subject to estate tax. The surviving spouse becomes the beneficiary of Trust A and has control over the trust assets during their lifetime. However, upon the death of the surviving spouse, any remaining assets in Trust A will be included in their taxable estate. Bypass Trust B, also referred to as the Credit Shelter Trust, is structured to take advantage of the deceased spouse's available estate tax exemption. When the first spouse passes away, a portion of their assets, up to the estate tax exemption amount, is transferred to Trust B. This amount is then excluded from the surviving spouse's taxable estate, potentially reducing the overall estate tax liability upon their death. Trust B typically provides income to the surviving spouse and/or other named beneficiaries, while preserving the trust principal for future generations. It is essential to note that Cook Illinois Marital Deduction Trusts can come in different variations, depending on the specific estate planning goals and needs of the individuals involved. Some variations include Qualified Terminable Interest Property (TIP) Trusts, which provide income to the surviving spouse while ensuring the ultimate distribution to other beneficiaries, such as children from a previous marriage. Another type is the General Power of Appointment (GPA) Trust, which grants the surviving spouse the ability to appoint trust assets among various beneficiaries, offering flexibility and control. In summary, Cook Illinois Marital Deduction Trust — Trust A and Bypass Trust B are two essential components of estate planning, allowing couples to maximize the marital deduction and minimize estate tax liability. The specific type and structure of these trusts can vary based on each individual's circumstances and objectives, ensuring the most favorable outcomes for the surviving spouse and future generations.
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.
