Is a credit shelter trust taxable?

A credit shelter trust works as a tax management tool because assets transferred to a surviving spouse are exempt from federal estate taxes. There's no limit on this amount. After the second spouse dies, taxes would normally be levied on any assets from that spouse's estate that are passed on to beneficiaries.

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Complex Will - Max. Credit Shelter Marital Trust to Children

Broward Florida Complex Will - Max. Credit Shelter Marital Trust to Children

Name: Broward Florida Complex Will - Max. Credit Shelter Marital Trust to Children
Brand: US Legal Forms
Rating: 4.55 (260 reviews)

Category:

Wills - Complex

State:

Multi-State

County:

Broward

Control #:

US-COMPLEX6

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This is a multi-state form covering the subject matter of the title.

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A credit shelter trust is a trust that is established in the will or living trust of the first to die of a married couple, most often for the benefit of a surviving spouse. It is generally created to avoid estate taxes at a first spouse's death by taking advantage of the available federal estate tax credit.

Because the goal of establishing a Credit Shelter Trust is non2010 inclusion in the estate of the surviving spouse, the assets in the Credit Shelter Trust do not obtain a second step up in income tax basis to fair market value when the surviving spouse dies.

Usually, the deceased spouse's portion of the couple's property, at least up to the applicable exclusion amount ($11.7 million), is put into trust B (the bypass trust). This trust is irrevocable and will pass to beneficiaries other than the surviving spouse (usually their children).

A credit shelter trust (CST) is a trust created after the death of the first spouse in a married couple. Assets placed in the trust are generally held apart from the estate of the surviving spouse, so they may pass tax-free to the remaining beneficiaries at the death of the surviving spouse.

The most common technique used by married couples to reduce their estate tax bill and pass more on to their beneficiaries is the use of a Credit Shelter Trust, also referred to as a Bypass or Family Trust, coupled with a Marital Trust, also referred to as a Marital Deduction Trust or QTIP Trust.

A credit shelter trust works as a tax management tool because assets transferred to a surviving spouse are exempt from federal estate taxes. There's no limit on this amount. After the second spouse dies, taxes would normally be levied on any assets from that spouse's estate that are passed on to beneficiaries.

A credit shelter trust is created after one partner in a marriage dies. Any assets that are put into the trust are considered separate from the estate of the spouse who is still alive. This allows them to go to the beneficiaries after the surviving spouse's death without incurring any tax.

Credit shelter trust (CST) (also called an AB trust or a bypass trust) is a tool used by well-off married individuals to legally maximize their estate tax exemptions. The strategy involves creating two separate trusts after one spouse passes.

The current federal estate tax exemption is $11.7 million. This means individuals can gift up to the federal exemption amount during their lifetime or after death without incurring a federal the death and lifetime gift tax is combined.

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Broward Florida Complex Will - Max. Credit Shelter Marital Trust to Children

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