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.
A Palm Beach Florida Marital Deduction Trust, also known as a "Bypass" or "A/B" Trust, is a specific type of estate planning tool that enables married couples to maximize their combined estate tax exemptions. By utilizing this trust strategy, couples can potentially reduce or eliminate estate taxes upon the death of the first spouse. Trust A, also referred to as the Marital Deduction Trust, is designed to hold the assets of the deceased spouse. Under this trust, the surviving spouse can receive income generated from the assets or even have the right to use the trust principal while still benefiting from potential estate tax savings. The surviving spouse can also be given limited trustee powers, allowing them to manage the assets to a certain extent. Trust B, commonly known as the Bypass (or Credit Shelter) Trust, holds the remaining assets of the deceased spouse that are not included in Trust A. The primary purpose of this trust is to shelter these assets from estate taxes upon the death of the surviving spouse. The assets in Trust B will ultimately pass to the remainder beneficiaries, typically the children or other chosen heirs, after the surviving spouse's death. The Palm Beach Florida Marital Deduction Trust — Trust A and Bypass Trust B are just two variations of the broader concept of Marital Deduction Trusts. Other types may include Qualified Terminable Interest Property (TIP) Trusts and Generation-Skipping Trusts (GSTs), which possess unique characteristics to address specific estate planning goals and circumstances. In summary, a Palm Beach Florida Marital Deduction Trust, consisting of Trust A and Bypass Trust B, serves as an effective estate planning strategy to minimize estate taxes upon the death of the first spouse while ensuring the financial security of the surviving spouse. It is advised to consult with a qualified estate planning attorney to determine the most suitable trust structure based on individual circumstances and objectives.A Palm Beach Florida Marital Deduction Trust, also known as a "Bypass" or "A/B" Trust, is a specific type of estate planning tool that enables married couples to maximize their combined estate tax exemptions. By utilizing this trust strategy, couples can potentially reduce or eliminate estate taxes upon the death of the first spouse. Trust A, also referred to as the Marital Deduction Trust, is designed to hold the assets of the deceased spouse. Under this trust, the surviving spouse can receive income generated from the assets or even have the right to use the trust principal while still benefiting from potential estate tax savings. The surviving spouse can also be given limited trustee powers, allowing them to manage the assets to a certain extent. Trust B, commonly known as the Bypass (or Credit Shelter) Trust, holds the remaining assets of the deceased spouse that are not included in Trust A. The primary purpose of this trust is to shelter these assets from estate taxes upon the death of the surviving spouse. The assets in Trust B will ultimately pass to the remainder beneficiaries, typically the children or other chosen heirs, after the surviving spouse's death. The Palm Beach Florida Marital Deduction Trust — Trust A and Bypass Trust B are just two variations of the broader concept of Marital Deduction Trusts. Other types may include Qualified Terminable Interest Property (TIP) Trusts and Generation-Skipping Trusts (GSTs), which possess unique characteristics to address specific estate planning goals and circumstances. In summary, a Palm Beach Florida Marital Deduction Trust, consisting of Trust A and Bypass Trust B, serves as an effective estate planning strategy to minimize estate taxes upon the death of the first spouse while ensuring the financial security of the surviving spouse. It is advised to consult with a qualified estate planning attorney to determine the most suitable trust structure based on individual circumstances and objectives.
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.
