SPIEGEL & UTRERA, P.A.

LAWYERS

PAYMENT IS NOT REQUIRED

SPIEGEL & UTRERA, P.A.

LAWYERS

PAYMENT IS NOT REQUIRED

A/B or Marital Exemption Trust

$699.95

Why A/B or Marital Exemption

A/B trusts, also known as Marital Exemption Trusts, are estate planning tools designed for married couples seeking to optimize tax efficiency and preserve wealth. These trusts operate by leveraging the applicable exclusion amount, allowing couples to potentially double the assets sheltered from estate taxes.

The trusts typically consist of an “A” trust, holding assets up to the exclusion amount, and a “B” trust, commonly known as the Marital or QTIP (Qualified Terminable Interest Property) trust, designed to benefit the surviving spouse.
Thinking of an A/B or Marital Exemption Trust?

  • Tax Efficiency:
    • A/B or Marital Exemption Trusts optimize estate tax planning.
    • They leverage the applicable exclusion amount, potentially doubling the amount sheltered from estate taxes.
  • Spousal Lifetime Access Trust (SLAT):
    • A/B trusts often include a Spousal Lifetime Access Trust (SLAT) component.
    • SLATs provide a vehicle for one spouse to make a gift to an irrevocable trust for the benefit of the other spouse, ensuring continued access to income and potential appreciation.
  • Preservation of Wealth:
    • A/B trusts minimize the impact of estate taxes, preserving family wealth for the transfer to the next generation.
    • Utilizing the marital deduction allows the surviving spouse to receive assets tax-free, postponing the tax liability until the second spouse's death.
  • Asset Protection:
    • A/B trusts offer asset protection by placing assets in an irrevocable trust, safeguarding them from creditors and potential legal claims.
  • Avoiding Probate:
    • Assets placed in the trust bypass probate, ensuring a smoother and more private transfer of wealth to heirs.
  • Control and Flexibility:
    • Establishing A/B trusts allows individuals to maintain control over how their assets are distributed, even after their death.
    • The flexibility to designate beneficiaries and terms within the trust provides a tailored approach to estate planning.
  • Generation-Skipping Transfer (GST) Planning:
    • A/B trusts can include provisions for generation-skipping transfer tax planning.
    • This allows for tax-efficient transfer of assets to grandchildren or more remote descendants, optimizing the intergenerational wealth transfer process.
  • Long-Term Care Planning:
    • A/B trusts can be part of long-term care planning strategies.
    • By structuring the trust appropriately, individuals may protect assets from being depleted to cover long-term care expenses, ensuring a legacy for future generations.

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Living trusts, prized for probate avoidance and streamlined asset distribution, see increasing popularity as individuals seek alternatives to conventional wills. Recognizing the advantages of heightened control, flexibility, and privacy in estate management, people are drawn to these trusts. Stay informed for optimal estate planning.