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.
The Lima Arizona Marital Deduction Trust, consisting of Trust A and Bypass Trust B, is a legal arrangement designed to maximize estate tax benefits for married couples in Lima, Arizona. This trust structure utilizes the marital deduction provision of the tax code, allowing spouses to pass on their assets to each other tax-free upon death. Here, we will delve into the intricacies and types of this trust to provide you with a comprehensive understanding. Trust A, also known as the "Marital Trust" or "A Trust," is an integral part of the Lima Arizona Marital Deduction Trust. It is specifically created to hold assets for the surviving spouse while qualifying for the marital deduction. This means that all property transferred to Trust A upon the death of the first spouse passes without any federal estate tax implications, as it is treated as though it is still owned by the surviving spouse. In contrast, Bypass Trust B, also referred to as the "B Trust" or "Family Trust," is established to hold assets for the benefit of the surviving spouse and future generations. Unlike Trust A, assets transferred to Bypass Trust B do not qualify for the marital deduction. Instead, they are utilized to maximize the use of both spouses' individual estate tax exemptions. The Bypass Trust B ensures that the value of these assets will not be included in the surviving spouse's estate and will consequently not be subject to estate taxes. It is important to note that there might be variations or specific types of Lima Arizona Marital Deduction Trust — Trust A and Bypass Trust B. These variations can be tailored to meet the unique needs and goals of each couple. For instance, there could be the option of establishing a TIP trust (Qualified Terminable Interest Property trust) within Trust A, which provides additional control over the distribution of assets to the surviving spouse and subsequent beneficiaries. Furthermore, the trust can contain provisions regarding the management and distribution of assets, as well as the appointment of trustees. Overall, the Lima Arizona Marital Deduction Trust — Trust A and Bypass Trust B offers married couples in Lima, Arizona, an efficient and strategic way to minimize estate taxes upon the passing of one spouse, while ensuring the preservation and effective distribution of assets to both the surviving spouse and future generations. By considering this trust structure, individuals can tailor their estate plans accordingly and secure financial security for their loved ones.The Lima Arizona Marital Deduction Trust, consisting of Trust A and Bypass Trust B, is a legal arrangement designed to maximize estate tax benefits for married couples in Lima, Arizona. This trust structure utilizes the marital deduction provision of the tax code, allowing spouses to pass on their assets to each other tax-free upon death. Here, we will delve into the intricacies and types of this trust to provide you with a comprehensive understanding. Trust A, also known as the "Marital Trust" or "A Trust," is an integral part of the Lima Arizona Marital Deduction Trust. It is specifically created to hold assets for the surviving spouse while qualifying for the marital deduction. This means that all property transferred to Trust A upon the death of the first spouse passes without any federal estate tax implications, as it is treated as though it is still owned by the surviving spouse. In contrast, Bypass Trust B, also referred to as the "B Trust" or "Family Trust," is established to hold assets for the benefit of the surviving spouse and future generations. Unlike Trust A, assets transferred to Bypass Trust B do not qualify for the marital deduction. Instead, they are utilized to maximize the use of both spouses' individual estate tax exemptions. The Bypass Trust B ensures that the value of these assets will not be included in the surviving spouse's estate and will consequently not be subject to estate taxes. It is important to note that there might be variations or specific types of Lima Arizona Marital Deduction Trust — Trust A and Bypass Trust B. These variations can be tailored to meet the unique needs and goals of each couple. For instance, there could be the option of establishing a TIP trust (Qualified Terminable Interest Property trust) within Trust A, which provides additional control over the distribution of assets to the surviving spouse and subsequent beneficiaries. Furthermore, the trust can contain provisions regarding the management and distribution of assets, as well as the appointment of trustees. Overall, the Lima Arizona Marital Deduction Trust — Trust A and Bypass Trust B offers married couples in Lima, Arizona, an efficient and strategic way to minimize estate taxes upon the passing of one spouse, while ensuring the preservation and effective distribution of assets to both the surviving spouse and future generations. By considering this trust structure, individuals can tailor their estate plans accordingly and secure financial security for their loved ones.
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.
