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 San Diego California Marital Deduction Trust is a specific type of trust that allows individuals or couples to maximize the value of their estate while also minimizing estate taxes. This trust is established by a married couple, typically for the purpose of providing financial security for the surviving spouse after one spouse passes away. Trust A, also known as the Marital Trust, is created to hold the assets of the deceased spouse. Within this trust, the surviving spouse is the primary beneficiary and has the right to income generated from the trust assets during their lifetime. The surviving spouse is also allowed to withdraw principal from the trust when needed for their support and maintenance. Upon the death of the surviving spouse, any remaining assets in Trust A are distributed to the designated beneficiaries, which are typically the couple's children or other chosen heirs. Trust B, also known as the Bypass Trust or Credit Shelter Trust, is established alongside Trust A. This trust holds assets up to the estate tax exemption amount (or an amount specifically designated by the couple) and is designed to bypass the surviving spouse's estate, hence the name. The purpose of Trust B is to make use of the deceased spouse's estate tax exemption, reducing the overall estate tax liability upon the death of the surviving spouse. The assets held in Trust B can provide additional financial security for the beneficiaries, typically the children or other designated heirs, upon the death of both spouses. By utilizing both Trust A and Trust B, couples in San Diego, California, can take advantage of the marital deduction while also preserving wealth and minimizing estate taxes. These trusts are particularly important in high-net-worth estates, as they can protect significant assets from unnecessary taxation. Estate planning professionals in San Diego are well-versed in establishing and managing these types of trusts, ensuring that individuals and couples have a comprehensive plan in place for the preservation and distribution of their assets. Overall, San Diego California Marital Deduction Trusts, consisting of Trust A and Bypass Trust B, provide married couples with a powerful estate planning tool to secure the financial well-being of the surviving spouse and future generations while minimizing tax burdens.A San Diego California Marital Deduction Trust is a specific type of trust that allows individuals or couples to maximize the value of their estate while also minimizing estate taxes. This trust is established by a married couple, typically for the purpose of providing financial security for the surviving spouse after one spouse passes away. Trust A, also known as the Marital Trust, is created to hold the assets of the deceased spouse. Within this trust, the surviving spouse is the primary beneficiary and has the right to income generated from the trust assets during their lifetime. The surviving spouse is also allowed to withdraw principal from the trust when needed for their support and maintenance. Upon the death of the surviving spouse, any remaining assets in Trust A are distributed to the designated beneficiaries, which are typically the couple's children or other chosen heirs. Trust B, also known as the Bypass Trust or Credit Shelter Trust, is established alongside Trust A. This trust holds assets up to the estate tax exemption amount (or an amount specifically designated by the couple) and is designed to bypass the surviving spouse's estate, hence the name. The purpose of Trust B is to make use of the deceased spouse's estate tax exemption, reducing the overall estate tax liability upon the death of the surviving spouse. The assets held in Trust B can provide additional financial security for the beneficiaries, typically the children or other designated heirs, upon the death of both spouses. By utilizing both Trust A and Trust B, couples in San Diego, California, can take advantage of the marital deduction while also preserving wealth and minimizing estate taxes. These trusts are particularly important in high-net-worth estates, as they can protect significant assets from unnecessary taxation. Estate planning professionals in San Diego are well-versed in establishing and managing these types of trusts, ensuring that individuals and couples have a comprehensive plan in place for the preservation and distribution of their assets. Overall, San Diego California Marital Deduction Trusts, consisting of Trust A and Bypass Trust B, provide married couples with a powerful estate planning tool to secure the financial well-being of the surviving spouse and future generations while minimizing tax burdens.
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.
