Credit Shelter/Applicable Exclusion Amount Shelter Trust
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Estate Plan of Convenience
Millions of Americans have an "estate plan of convenience" that consists of owning assets either in joint tenancies or by completing "payable on death" beneficiary designation forms given to them by their insurance and other financial services companies. This minimal planning works for many people, but it's often much more beneficial to look further into the future and do more long-range planning.
Unlimited Marital Deduction
Since a surviving spouse who is a U.S. citizen can inherit unlimited amounts without tax or probate, many couples think that they don't need to do anything beyond owning everything jointly or filling out a beneficiary form. When one spouse dies, there is no tax or probate. Everything is easily acquired by the survivor. But what happens upon the survivor's death? That depends on a lot of circumstances, and the end result may not be simple or desired.
What Is a Shelter Trust?
Shelter Trusts, commonly referred in estate planning circles as "applicable exclusion amount" trusts, "unified credit" trusts, and "AB" trusts are often used to minimize or eliminate estate taxes and add elements of control that last long after both spouses die.
Though Shelter Trusts, like most other legal documents, can be convoluted, they are a relatively easy tool for married people to use to avoid estate taxes and probate upon a surviving spouse's eventual death. A Shelter Trust often benefits the surviving spouse (primarily or exclusively) and can even be controlled by that person as trustee. Money can be paid based upon the survivor's needs or some other standard set forth in the trust document. One key to Shelter Trust planning is that, if properly segregated from the rest of his or her own assets, the Shelter Trust, including its growth, does not become part of the survivor's estate, potentially compounding an estate tax problem or further devolving to the "wrong" ultimate beneficiaries.
Types of Trusts We Establish:
- Revocable/Irrevocable Trust
- Irrevocable Life Insurance Trust
- Supplemental Special Needs Trust
- Generation Skipping Trust
- Charitable Trusts
- Credit Shelter/Applicable Exclusion Amount Shelter Trust
- Pet Trust
- Estate Freeze Trust
- Qualified Personal Residence Trust (QPRT)
- Qualified Domestic Trust
- Life Partner and LGBT
