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.
Oakland Michigan Marital Deduction Trust — Trust A and Bypass Trust B are estate planning tools commonly used by married couples in Oakland County, Michigan. These trusts are created to maximize the estate tax benefits available to married individuals while ensuring the efficient distribution of assets upon their death. Trust A, also known as the Marital Deduction Trust, is established to take full advantage of the marital deduction allowed under federal tax laws. The marital deduction allows a deceased spouse to leave an unlimited amount of assets to the surviving spouse without incurring federal estate taxes. By utilizing Trust A, a married couple can ensure that their assets are protected and transferred to the surviving spouse without any estate tax consequences. The surviving spouse has the right to use and benefit from the assets held in Trust A during their lifetime. Bypass Trust B, also known as the Credit Shelter Trust or the Family Trust, is created to utilize the decedent's available federal estate tax exemption. This trust is funded with an amount equal to the maximum estate tax exemption, ensuring that the exemption amount is fully utilized. By doing so, the assets held in Trust B pass outside the surviving spouse's estate and are not subject to federal estate taxes upon their death. The surviving spouse may still receive income generated from the assets held in Trust B, but the principal is preserved for the beneficiaries named in the trust agreement, typically the couple's children or other heirs. Different types of Marital Deduction Trusts and Bypass Trusts are not specific to Oakland, Michigan. However, there may be variations in the terms and conditions of these trusts based on individual preferences, state laws, and estate planning goals. Couples in Oakland, Michigan, should consult with an experienced estate planning attorney who can guide them in choosing the most appropriate type of trust based on their unique circumstances. In summary, the Oakland Michigan Marital Deduction Trust — Trust A and Bypass Trust B are crucial estate planning tools used to minimize estate taxes and ensure the seamless transfer of assets to the surviving spouse and future generations. Creating these trusts requires careful consideration of individual circumstances and professional legal guidance.Oakland Michigan Marital Deduction Trust — Trust A and Bypass Trust B are estate planning tools commonly used by married couples in Oakland County, Michigan. These trusts are created to maximize the estate tax benefits available to married individuals while ensuring the efficient distribution of assets upon their death. Trust A, also known as the Marital Deduction Trust, is established to take full advantage of the marital deduction allowed under federal tax laws. The marital deduction allows a deceased spouse to leave an unlimited amount of assets to the surviving spouse without incurring federal estate taxes. By utilizing Trust A, a married couple can ensure that their assets are protected and transferred to the surviving spouse without any estate tax consequences. The surviving spouse has the right to use and benefit from the assets held in Trust A during their lifetime. Bypass Trust B, also known as the Credit Shelter Trust or the Family Trust, is created to utilize the decedent's available federal estate tax exemption. This trust is funded with an amount equal to the maximum estate tax exemption, ensuring that the exemption amount is fully utilized. By doing so, the assets held in Trust B pass outside the surviving spouse's estate and are not subject to federal estate taxes upon their death. The surviving spouse may still receive income generated from the assets held in Trust B, but the principal is preserved for the beneficiaries named in the trust agreement, typically the couple's children or other heirs. Different types of Marital Deduction Trusts and Bypass Trusts are not specific to Oakland, Michigan. However, there may be variations in the terms and conditions of these trusts based on individual preferences, state laws, and estate planning goals. Couples in Oakland, Michigan, should consult with an experienced estate planning attorney who can guide them in choosing the most appropriate type of trust based on their unique circumstances. In summary, the Oakland Michigan Marital Deduction Trust — Trust A and Bypass Trust B are crucial estate planning tools used to minimize estate taxes and ensure the seamless transfer of assets to the surviving spouse and future generations. Creating these trusts requires careful consideration of individual circumstances and professional legal guidance.
