a cornerstone of estate planning for families with taxable estates
a mechanism for which married couples can each take advantage of their applicable exemption amount
a receptacle for property that will pass tax free to descendants or other beneficiaries because of the federal estate tax exemption
a testamentary trust designed explicitly for tax savings purposes
An estate planning device (also called a bypass 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 credit shelter trust permits a maximum of $1.350,000 transfer to heirs of the spouses on an estate tax free basis under the unified gift and estate tax credits as they exist in 2001.
A trust designed not to qualify for the unlimited estate tax marital deduction so that it will use up your lifetime exclusion (unified credit). Often the same as a by-pass trust because such a trust by-passes (is not included in) your surviving spouse's estate.
Another name for the B Trust in an A-B living trust because this trust "shelters" or preserves the federal estate tax "credit" of the deceased spouse.
a trust structured to utilize an individual's estate and gift tax exemption. The trust is referred to as a "credit shelter" because it is sheltering the taxpayer's tax credit.
A Trust established to retain your federal-estate tax exemption for your heirs, $675,000 in 2001 and increasing to $1,000,000 in 2002. A Credit Shelter Trust is also referred to as a Bypass Trust, Exemption Trust, Non-Marital Trust, or is part of an “A/B” Trust.
A trust (usually equal in value to a person's unified credit) that can benefit a spouse, under certain conditions, and other beneficiaries designated in the trust.
A Trust that uses an individual's $1,000,000 exclusion for federal estate and gift tax purposes. The amount allowed under the current law (2002) is $1,000,000 the amount is subject to change in the future
An estate-planning tool that allocates part of an individual's estate into a separate trust with the remainder of the estate passing to the surviving spouse. The trust can help minimize or eliminate estate taxes due upon an individual's death or death of a spouse.
Also called "bypass trust." - A trust that springs into life when the first of two spouses passes away. The "credit shelter trust" is funded with an amount of property whose value is equal to the estate tax exemption. An estate plan with this type of trust is capable of sheltering from estate taxes an amount equal to TWICE the estate tax exemption. For 2005, the estate tax exemption is $1.5 million. A plan with a family trust will work only if spouse owns the assets properly and if beneficiary designations are proper as well.
Synonym for "By-Pass Trust". (see above).
A trust designed to protect the unified credit that each person may gift or bequeath to heirs. This is often referred to as a bypass trust because the trust assets more or less bypass the surviving spouse and are not included in her estate. Still, the surviving spouse can have certain rights in the trust during her lifetime. It also is referred to as the "B" trust in an "A-B" trust. Since the unified credit has been replaced by the applicable exemption amount under the Tax Relief Act of 2001, the term "credit shelter trust" is now more accurately referred to as the "applicable exemption amount shelter trust" - same effect, new terminology.
A credit shelter trust is a trust designed to use the decedent's Applicable exclusion amount, but retain the assets in trust for the benefit of a surviving spouse.