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 Wayne Michigan Marital Deduction Trust, also known as Trust A, is a type of trust that provides advantageous estate planning benefits for married couples residing in Wayne, Michigan. This trust allows spouses to maximize the use of their estate tax exemptions while ensuring financial security for the surviving spouse. Trust A is established when the first spouse passes away and typically holds assets equal to or less than the available federal estate tax exemption. The primary purpose of this trust is to qualify for the marital deduction, which allows the assets to pass to the surviving spouse without incurring any estate tax liability in most cases. By utilizing the marital deduction, Trust A can effectively defer the estate taxes until the passing of the surviving spouse. Bypass Trust B, also associated with the Wayne Michigan Marital Deduction Trust, is a complementary trust that is commonly created alongside Trust A. This trust is designed to make use of the deceased spouse's remaining estate tax exemption, often referred to as the "unified credit." By allocating assets to Bypass Trust B, those assets are excluded from the surviving spouse's taxable estate, thus potentially reducing potential estate taxes upon their passing. There are variants of Trust A and Bypass Trust B that cater to different individuals' needs and circumstances, such as: 1. Irrevocable Marital Deduction Trust: This type of trust cannot be modified or revoked by the granter spouse once it is established. It provides a high level of tax planning and protection for the surviving spouse, ensuring the preservation of wealth for future generations. 2. Testamentary Marital Deduction Trust: Instead of being established during the granter's lifetime, this trust is created under their will and is activated upon their passing. It ensures that the marital deduction is maximized while allowing flexibility in managing assets during the granter's life. 3. Qualified Terminable Interest Property (TIP) Trust: This type of trust allows the granter spouse to control the ultimate distribution of assets among multiple beneficiaries, such as children from previous marriages, while still qualifying for the marital deduction. It provides enhanced protection and the ability to address complex family situations. In conclusion, the Wayne Michigan Marital Deduction Trust — Trust A and Bypass Trust B are essential estate planning tools for married couples in Wayne, Michigan, looking to minimize estate taxes while ensuring financial security for their surviving spouse. Different variations of these trusts exist to accommodate various needs and circumstances, each providing unique benefits and levels of control over asset distribution.The Wayne Michigan Marital Deduction Trust, also known as Trust A, is a type of trust that provides advantageous estate planning benefits for married couples residing in Wayne, Michigan. This trust allows spouses to maximize the use of their estate tax exemptions while ensuring financial security for the surviving spouse. Trust A is established when the first spouse passes away and typically holds assets equal to or less than the available federal estate tax exemption. The primary purpose of this trust is to qualify for the marital deduction, which allows the assets to pass to the surviving spouse without incurring any estate tax liability in most cases. By utilizing the marital deduction, Trust A can effectively defer the estate taxes until the passing of the surviving spouse. Bypass Trust B, also associated with the Wayne Michigan Marital Deduction Trust, is a complementary trust that is commonly created alongside Trust A. This trust is designed to make use of the deceased spouse's remaining estate tax exemption, often referred to as the "unified credit." By allocating assets to Bypass Trust B, those assets are excluded from the surviving spouse's taxable estate, thus potentially reducing potential estate taxes upon their passing. There are variants of Trust A and Bypass Trust B that cater to different individuals' needs and circumstances, such as: 1. Irrevocable Marital Deduction Trust: This type of trust cannot be modified or revoked by the granter spouse once it is established. It provides a high level of tax planning and protection for the surviving spouse, ensuring the preservation of wealth for future generations. 2. Testamentary Marital Deduction Trust: Instead of being established during the granter's lifetime, this trust is created under their will and is activated upon their passing. It ensures that the marital deduction is maximized while allowing flexibility in managing assets during the granter's life. 3. Qualified Terminable Interest Property (TIP) Trust: This type of trust allows the granter spouse to control the ultimate distribution of assets among multiple beneficiaries, such as children from previous marriages, while still qualifying for the marital deduction. It provides enhanced protection and the ability to address complex family situations. In conclusion, the Wayne Michigan Marital Deduction Trust — Trust A and Bypass Trust B are essential estate planning tools for married couples in Wayne, Michigan, looking to minimize estate taxes while ensuring financial security for their surviving spouse. Different variations of these trusts exist to accommodate various needs and circumstances, each providing unique benefits and levels of control over asset distribution.
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.
