A-B Trust Planning

Categories: Estate Planning,

The typical arrangement used in marital deduction estate tax planning by spouses to create at the first death a marital trust or A Trust� for the benefit of the surviving spouse for life and a bypass or B Trust� containing assets equal to the deceased spouse's remaining unified credit exclusion amount. The B Trust is frequently referred to as the credit shelter trust� or family trust� and is typically held for the surviving spouse's lifetime for the collective benefit of the spouse and the couple's descendants and generally passes at the death of the surviving spouse to the beneficiaries free of estate taxes regardless of the value of the B Trust at that time.