A sub-trust created following the death of a co-trustor spouse. The assets placed into the bypass trust or "B trust" are considered to be part of the decedent spouse's estate and not that of the surviving spouse. This helps to minimize exposure for estate tax.
Any trust that created a life estate for a life beneficiary, with the trust principal going to the final beneficiary when the life beneficiary dies. See AB Trust, marital life estate trust, spousal bypass trust, or a marital exemption trust.
A trust designed not to qualify for the unlimited estate tax marital deduction. Commonly referred to as the family trust, or B trust, it is designed to make use of the lifetime $600,000 exclusion (unified credit).
A trust which is set up to bypass the surviving spouse's estate, thereby allowing full use of the applicable exclusion amount for both spouses. Codicil: A written change or amendment to a will. Conservator: An individual appointed by the court to administrate the affairs of an incapacitated adult. Credit shelter trust: See bypass trust.
Also called a marital life estate or an A-B trust. A trust designed to help couples with combined assets over $600,000 save money on estate taxes. A bypass trust allows each member of a couple to use the $600,000 estate tax exemption. I Back to Top I ..........................................................................................................................................
A trust which contains property on which Federal Taxes are paid at the death of the first spouse to die, and which typically is not taxed at the second death. Where the optimum marital deduction plan is used, the tax on the property in this trust is paid by the Applicable Credit Amount and it is sometimes referred to as the Credit Shelter Trust.
A trust that holds someone's assets so they are not taxed. When the person dies, the assets stay in the trust until the person's spouse dies. Then, they are given to the beneficiaries. The assets are not taxed when the person dies or when their spouse dies.
A trust which is set up at your death with an amount up to the applicable estate exclusion amount available at that time. Your spouse receives income and any necessary money (subject to restrictions) for the rest of his or her life, and then your children or other survivors get the remainder. This trust is designed to take advantage of both spouse's applicable estate credits.
Also known as a Credit Shelter Trust, an Exemption Equivalent Trust or a "B" Trust. This trust makes use of the unified credit equivalent of the first spouse to die to shelter assets from federal estate tax.
An irrevocable trust that is designed to pay trust income (and principal, if needed) to an individual's spouse for the duration of the spouse's lifetime. The bypass trust is not included in the beneficiary spouse's estate and is not subject to federal estate taxes upon his/her death.
A way of sheltering your assets from taxes when a spouse dies. Since only $650,000 can be passed on free of federal estate taxes, a bypass trust can be created whereby upon the death, that spouse's individual assets go into a trust.
An estate planning device (also called a credit shelter trust, family trust, or B trust in "AB" plans where the A trust funds for the marital deduction) used to minimize the combined estate taxes payable by spouses whereby, at the death of the first spouse, the estate is divided into two parts and one part is placed in trust usually to benefit the surviving spouse without being taxed at the surviving spouse's death, while the other part passes outright to the surviving spouse or is placed in a marital deduction trust. A by-pass trust permits a maximum of $1.500,000 transfer to heirs of the spouses on an estate tax free basis under the unified gift and estate tax credits as they exist in 2005.