Protect your family and avoid the expense of probate with this easytouse software. Browse estate planning templates and examples you can make with smartdraw. These trusts have big benefits, but they have drawbacks, too. And even with the increase in the federal estate tax exemption and the creation of portability of the estate tax exemption, ab trust planning is. Bypass trusts are used by wealthy couples to avoid paying the federal estate tax.
An ab trust, or bypass trust, may help some couples avoid estate tax. A courtcontrolled program for persons who are unable to manage their own. Beyond counsel allows me to produce better customized will and trust documents for a variety of clients in record time. An ab trust is a joint trust created by a married couple with the goal of. Are ab trusts still a solid estate planning tool for married couples. Credit shelter trust vs an ab trust estate planning software for. Married couples can maximize the use of both of their federal exemptions from estate tax by using ab trusts as part of their estate plan. Getting stretch ira treatment with an ab trust michael kitces. Create a legally valid living trust quickly and easily.
The ab trust plan results in the b trust, or bypass trust, being funded upon the death of the first spouse with an amount equal to the applicable estate tax. Many estateplanning informational presentations refer to ab trusts and credit shelter trusts interchangeably. Ab trust a trust that includes a taxplanning provision that lets you provide for. Married couples can maximize the use of both of their federal exemptions from estate taxes by using ab trusts as part of their estate plan. Create estate planning examples like this template called basic estate planning ab trust that you can easily edit and customize in minutes.
Opinions expressed by forbes contributors are their own. If you created an ab trust a few years back, when the estate tax exemption was much lower and many more people paid the tax, you may think that theres no harm in keeping the trust. Restrictions on the surviving spouses use of the property. Interviews with clients can be done easily and an online questionnaire can be built for preparing a living trust, power of attorney and will. The surviving spouse has only limited rights to use trust property in the irrevocable trust. Credit shelter trust vs an ab trust estate planning. There are benefits to limiting a spouses outright access to trust assets, but unforeseen problems may arise if the spouse requires unfettered access to funds. Many people believe that having an estate plan simply means drafting a will or a trust. But the financial and estate planning issues that result from remarriage can be.
Trusts with more complex tax planning provisions, such as ab trusts, are a more expensive engagement for the client compared with other planning options. Getting married for a second time is fairly common. Nolos living trust 2020 online living trust software nolo. How a bypass trust works in an estate plan smartasset. If you are interested in an ab trust, talk to an experienced estate planning lawyer. This software is designed to make estate planning easy for the attorneys by enabling automated will and trust documents.
In a standard ab trust, the surviving spouse controls the assets and can be the named trustee. The first, or a trust, contains assets of both spouses, and, created upon the death of one spouse, a second trust to hold assets of the deceased spouse, the b trust. Estate planning part iii bypass trusts cpa practice advisor. However, there is much more to include in your estate planning to make certain all of. The a trust is also commonly referred to as the marital trust, qtip trust, or marital deduction trust. A bypass trust, or ab trust, is a legal arrangement that allows married couples to avoid estate tax on certain assets when one spouse passes. The ab trust system can be set up under the couples last will and testaments or revocable living trusts.