The phrase "credit shelter trust" trust refers to a trust that is designed to make maximum use of the unified credit for estate taxes -- which is also known as the lifetime exemption. Each individual is allowed a once-in-a-lifetime exemption from estate and gift taxes. However, the exemption is computed as a credit against the estate and gift tax that is sufficient to offset the tax on an estate of a specified size. A credit shelter trust is designed to make maximum use of the unified credit for estate taxes. Each individual is allowed a once-in-a-lifetime credit from estate and gift taxes. For 2009 the exempt amount is 3.5 million. By the year 2010 the inheritance tax is eliminated but if congress does not make the elimination permanent in the following year the tax will return and the exempt amount will be $1.0 million. Since it is any one's guess what congress will do, planning to maximize the credit is still the smartest estate plan for married couples to utilize.
The parties must split there assets so that roughly 1/2 half of the assets are held by Spouse One and 1/2 of the assets are held by Spouse Two. Each spouse then provides by will or living trust that upon their death the amount of their assets up to the exemption amount are to be held in a trust known as the credit shelter trust. The trust typically provides that the surviving spouse has entitlement to the income and to the principal provided that there are "ascertainable standards" established in accordance with IRS law for the trustee to distribute principal to the surviving spouse.
When the first spouse dies the credit shelter trust is exempt from tax. When the surviving spouse dies the surviving spouse's estate up to the exempt amount is also exempt from tax. This way the parties can exempt twice as much of their combined estates from taxation and save their loved ones substantial tax savings without losing beneficial use and enjoyment of their assets during their lifetimes.
Content: The Frisco Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust is a legal document designed to ensure the smooth distribution of assets and protect the rights of both the spouse and children in the event of the will maker's demise. This specialized will is created specifically for married individuals residing in Frisco, Texas, who have children and wish to establish trusts for both their spouse and children. The key feature of this will is the inclusion of a Credit Shelter Trust (also known as a bypass trust or a family trust). This trust allows the estate owner to maximize the use of the federal estate tax exemption by placing a portion of their assets into the trust, thereby reducing the tax burden on their estate. The surviving spouse can benefit from the trust income while safeguarding the trust assets for the children's future inheritance. In addition to the Credit Shelter Trust, the Frisco Married Person's Will also establishes a Trust for Children, often known as the Marital Trust. This trust is designed to provide for the financial needs of the children while ensuring that their inheritance is protected and managed responsibly. The assets placed in this trust can be used for various purposes, including education, healthcare, and general support until the children reach a certain age determined by the will maker. By utilizing the Frisco Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust, individuals can enjoy the peace of mind that comes with knowing their assets will be distributed according to their desires and that their loved ones will be adequately provided for. This will can be customized to fit personal circumstances and desires and can be created with the help of an experienced estate planning attorney to ensure compliance with relevant Texas laws. Different types of Frisco Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children include: 1. Frisco Married Person's Will with Equal Distribution: This type of will ensures that the estate is equally divided between the surviving spouse and children, without any specific percentages allocated to the trust for spouse or trust for children. 2. Frisco Married Person's Will with Unequal Distribution: Unlike the equal distribution will, this type allows the will maker to allocate different percentages of the estate to the trust for the spouse and trust for the children based on their specific preferences and financial needs. 3. Frisco Married Person's Will with Age-Based Distributions: This variation includes provisions that specify when and how the assets held in the trust for children should be distributed based on the age or milestones reached by each child. For instance, funds could be distributed gradually as the child reaches specific ages, such as 25, 30, and 35, to promote responsible financial management. It is important to consult with a knowledgeable attorney specializing in estate planning to determine the most suitable type of Frisco Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust based on individual circumstances and objectives.Content: The Frisco Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust is a legal document designed to ensure the smooth distribution of assets and protect the rights of both the spouse and children in the event of the will maker's demise. This specialized will is created specifically for married individuals residing in Frisco, Texas, who have children and wish to establish trusts for both their spouse and children. The key feature of this will is the inclusion of a Credit Shelter Trust (also known as a bypass trust or a family trust). This trust allows the estate owner to maximize the use of the federal estate tax exemption by placing a portion of their assets into the trust, thereby reducing the tax burden on their estate. The surviving spouse can benefit from the trust income while safeguarding the trust assets for the children's future inheritance. In addition to the Credit Shelter Trust, the Frisco Married Person's Will also establishes a Trust for Children, often known as the Marital Trust. This trust is designed to provide for the financial needs of the children while ensuring that their inheritance is protected and managed responsibly. The assets placed in this trust can be used for various purposes, including education, healthcare, and general support until the children reach a certain age determined by the will maker. By utilizing the Frisco Married Person's Will with a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust, individuals can enjoy the peace of mind that comes with knowing their assets will be distributed according to their desires and that their loved ones will be adequately provided for. This will can be customized to fit personal circumstances and desires and can be created with the help of an experienced estate planning attorney to ensure compliance with relevant Texas laws. Different types of Frisco Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children include: 1. Frisco Married Person's Will with Equal Distribution: This type of will ensures that the estate is equally divided between the surviving spouse and children, without any specific percentages allocated to the trust for spouse or trust for children. 2. Frisco Married Person's Will with Unequal Distribution: Unlike the equal distribution will, this type allows the will maker to allocate different percentages of the estate to the trust for the spouse and trust for the children based on their specific preferences and financial needs. 3. Frisco Married Person's Will with Age-Based Distributions: This variation includes provisions that specify when and how the assets held in the trust for children should be distributed based on the age or milestones reached by each child. For instance, funds could be distributed gradually as the child reaches specific ages, such as 25, 30, and 35, to promote responsible financial management. It is important to consult with a knowledgeable attorney specializing in estate planning to determine the most suitable type of Frisco Married Person's Will for the State of Texas with Children With a Credit Shelter Trust for Spouse and a Trust for Children — Marital Trust based on individual circumstances and objectives.
