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.
Franklin Ohio Marital Deduction Trust, also known as Trust A, is a legal arrangement designed to provide tax benefits and asset protection to married couples. This trust is established upon the death of the first spouse and contains provisions that allow the surviving spouse to enjoy the benefits of the trust assets while reducing their taxable estate. The main purpose of a Franklin Ohio Marital Deduction Trust — Trust A is to make use of the marital deduction, which allows an unlimited transfer of assets between spouses without incurring federal estate tax. By placing assets in this trust, the value of those assets is excluded from the deceased spouse's taxable estate, potentially resulting in significant tax savings for the surviving spouse. Trust A typically includes various provisions to ensure that the assets are protected and utilized properly. It may provide the surviving spouse with income generated by the trust assets during their lifetime while preserving the principal for the benefit of other beneficiaries, such as children or grandchildren, after the surviving spouse's death. Bypass Trust B, also known as the Credit Shelter Trust or Family Trust, is another type of trust often used in conjunction with a Franklin Ohio Marital Deduction Trust. Upon the death of the first spouse, a portion of the deceased spouse's assets, up to the maximum federal estate tax exemption amount, is transferred to Trust B. The primary purpose of Bypass Trust B is to utilize the deceased spouse's federal estate tax exemption and maximize the amount of assets that can pass to beneficiaries free from estate tax. Similar to Trust A, Trust B can provide income for the surviving spouse while preserving the principal for the ultimate beneficiaries, such as children or grandchildren. By creating both Trust A and Trust B, couples can leverage the marital deduction and federal estate tax exemption effectively. This comprehensive estate planning strategy aims to minimize estate taxes, protect assets, and provide for the financial needs of the surviving spouse and future generations. It's important to note that the specific terms and conditions of Franklin Ohio Marital Deduction Trusts can vary based on individual circumstances and preferences. Consulting with an experienced estate planning attorney is crucial to ensure the trust is tailored to meet your unique goals and objectives.Franklin Ohio Marital Deduction Trust, also known as Trust A, is a legal arrangement designed to provide tax benefits and asset protection to married couples. This trust is established upon the death of the first spouse and contains provisions that allow the surviving spouse to enjoy the benefits of the trust assets while reducing their taxable estate. The main purpose of a Franklin Ohio Marital Deduction Trust — Trust A is to make use of the marital deduction, which allows an unlimited transfer of assets between spouses without incurring federal estate tax. By placing assets in this trust, the value of those assets is excluded from the deceased spouse's taxable estate, potentially resulting in significant tax savings for the surviving spouse. Trust A typically includes various provisions to ensure that the assets are protected and utilized properly. It may provide the surviving spouse with income generated by the trust assets during their lifetime while preserving the principal for the benefit of other beneficiaries, such as children or grandchildren, after the surviving spouse's death. Bypass Trust B, also known as the Credit Shelter Trust or Family Trust, is another type of trust often used in conjunction with a Franklin Ohio Marital Deduction Trust. Upon the death of the first spouse, a portion of the deceased spouse's assets, up to the maximum federal estate tax exemption amount, is transferred to Trust B. The primary purpose of Bypass Trust B is to utilize the deceased spouse's federal estate tax exemption and maximize the amount of assets that can pass to beneficiaries free from estate tax. Similar to Trust A, Trust B can provide income for the surviving spouse while preserving the principal for the ultimate beneficiaries, such as children or grandchildren. By creating both Trust A and Trust B, couples can leverage the marital deduction and federal estate tax exemption effectively. This comprehensive estate planning strategy aims to minimize estate taxes, protect assets, and provide for the financial needs of the surviving spouse and future generations. It's important to note that the specific terms and conditions of Franklin Ohio Marital Deduction Trusts can vary based on individual circumstances and preferences. Consulting with an experienced estate planning attorney is crucial to ensure the trust is tailored to meet your unique goals and objectives.
