AB Trust: Help for your Spouse, Maximum Advantage to your Beneficiaries.

An AB trust (sometimes referred to as a credit shelter trust) allows a married couple to ensure that the surviving spouse reaps financial benefits from the couple’s estate while he or she lives, and allows them to pass the maximum amount of property to their beneficiaries (usually their children) after they die.

Under an AB trust, when the first spouse dies, the trust must be split into two separate trusts: Trust A will contain the property of the deceased spouse, and Trust B will hold the property of the surviving spouse. When the first spouse dies, the property in Trust A goes to named beneficiaries. However, the surviving spouse usually retains the right to use the property for life. When the surviving spouse dies, the property in Trust B passes to the beneficiaries. Importantly, the Trust B property is not considered part of the second spouse’s estate for estate tax purposes.

If you live in Michigan and need experienced estate planning help, contact Michael Einheuser for a free consultation. Michael helps families in Bingham FarmsTroyFarmington HillsRochester HillsSouthfieldWest Bloomfield TownshipBloomfield Township, and the surrounding Michigan areas.

Schedule your Free Consultation today: (248) 398-4665.

Return from the AB Trust article to Living Trusts.


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