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.
The Sugar Land 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 comprehensive estate planning document designed specifically for married couples residing in Sugar Land, Texas. This will cater to individuals with children, aiming to protect the financial security of both the surviving spouse and the children in the event of the testator's death. The Marital Trust, also known as a "A Trust" or "Surviving Spouse Trust", is an integral component of this will. It allows the surviving spouse to benefit from the assets held within the trust while providing for the distribution of assets to the children upon the surviving spouse's passing. The Marital Trust ensures that the surviving spouse has access to income or principal from the trust, providing financial security, and allowing the estate to qualify for certain tax benefits. The Credit Shelter Trust, also referred to as a "B Trust" or "Family Trust," is another important element of this Sugar Land Married Person's Will. It is established to maximize estate tax savings by utilizing both spouses' unified federal estate tax exemptions. Upon the death of the first spouse, a portion of the assets, up to the maximum exemption amount, is transferred to the Credit Shelter Trust, thereby avoiding estate taxes. The surviving spouse can benefit from the income generated by the trust while still securing the inheritance for the children. This Will allows for the allocation of assets to the testamentary trusts in a manner that minimizes estate taxes and maximizes the wealth passed down to the surviving spouse and children. It provides peace of mind to married couples residing in Sugar Land, Texas, by ensuring the efficient transfer of wealth and the security of the family's financial future. In summary, the Sugar Land 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 comprehensive estate planning solution that considers the unique needs of married couples with children. By utilizing the Credit Shelter Trust and the Marital Trust, this will aims to minimize tax burdens, provide financial security for the surviving spouse, and preserve wealth for future generations.The Sugar Land 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 comprehensive estate planning document designed specifically for married couples residing in Sugar Land, Texas. This will cater to individuals with children, aiming to protect the financial security of both the surviving spouse and the children in the event of the testator's death. The Marital Trust, also known as a "A Trust" or "Surviving Spouse Trust", is an integral component of this will. It allows the surviving spouse to benefit from the assets held within the trust while providing for the distribution of assets to the children upon the surviving spouse's passing. The Marital Trust ensures that the surviving spouse has access to income or principal from the trust, providing financial security, and allowing the estate to qualify for certain tax benefits. The Credit Shelter Trust, also referred to as a "B Trust" or "Family Trust," is another important element of this Sugar Land Married Person's Will. It is established to maximize estate tax savings by utilizing both spouses' unified federal estate tax exemptions. Upon the death of the first spouse, a portion of the assets, up to the maximum exemption amount, is transferred to the Credit Shelter Trust, thereby avoiding estate taxes. The surviving spouse can benefit from the income generated by the trust while still securing the inheritance for the children. This Will allows for the allocation of assets to the testamentary trusts in a manner that minimizes estate taxes and maximizes the wealth passed down to the surviving spouse and children. It provides peace of mind to married couples residing in Sugar Land, Texas, by ensuring the efficient transfer of wealth and the security of the family's financial future. In summary, the Sugar Land 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 comprehensive estate planning solution that considers the unique needs of married couples with children. By utilizing the Credit Shelter Trust and the Marital Trust, this will aims to minimize tax burdens, provide financial security for the surviving spouse, and preserve wealth for future generations.
