What is an AB Trust?
Many people are afraid that if their spouse passes away they will face a hefty tax bill. However, spouses can set up an AB trust. An AB trust is a type of irrevocable trust that while technically passing on the property to the couple’s children, the surviving spouse can actually live and use the assets. After the surviving spouse passes, the assets will transfer to the children. The benefit of the AB trust is to keep a portion of the taxable estate in an irrevocable trust which allows the children to receive a much larger amount of assets than they would otherwise. However, setting up an AB trust can be somewhat complicated because the limits of the surviving spouse are limited by the IRS’ rules. If the surviving spouse exceeds the IRS’ rules, then the AB trust may be deemed to be illegal. Because of the complexities of setting up an AB trust, it is best to work with an attorney who specializes in estate planning.
Additional Trusts Articles
- Estate Planning Tools for Wealth Transfer
- How to Prove and Recover Damages for Trust Mismanagement
- Living Trusts
- How to Decide if You Need a Trust and Estates Attorney
- Establishing a Trust for Your Kids
- What Is Estate Planning?
- Does It Make Sense To Use An Attorney? Is It Expensive?
- When Should I Start My Estate Plan?
- What Sorts Of Instructions Are Made As Part Of An Estate Plan?
- How Can I Reduce My Estate Tax Upon My Death?
- What Is A Trust?
- What Is The Difference Between A Will And A Trust?
- What are Some Typical Estate Planning Documents?
- If I Set Up A Living Trust, Do I Still Need A Will?
- When is Probate Necessary?