Backdating allocation of marital assets into survivor trust

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While AB trusts are a great way to minimize estate taxes, they are not used much today.This is because each individual has a combined lifetime federal gift tax and estate tax exemption of .43 million.However, if the other spouse dies and his or estate tax exemption is

While AB trusts are a great way to minimize estate taxes, they are not used much today.This is because each individual has a combined lifetime federal gift tax and estate tax exemption of $5.43 million.However, if the other spouse dies and his or estate tax exemption is $1 million, the taxable portion of the estate will be $2 million.This means that $2 million will be taxed at 40% and the remaining amount will be transferred to the beneficiaries.Separate property may be held in the couple’s joint revocable living trust provided that the separate property is not commingled with the community property and the couple keeps track of the separate property asset apart from the community property assets held in the living trust.Unlike the Bypass Trust, the amount of assets allocated to the Survivor=s Trust is not dependent on the amount available to be sheltered from estate tax.To circumvent the estate from being subject to such steep taxes, many married couples set up a trust under their last will and testaments called an A-B trust.

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While AB trusts are a great way to minimize estate taxes, they are not used much today.

This is because each individual has a combined lifetime federal gift tax and estate tax exemption of $5.43 million.

However, if the other spouse dies and his or estate tax exemption is $1 million, the taxable portion of the estate will be $2 million.

This means that $2 million will be taxed at 40% and the remaining amount will be transferred to the beneficiaries.

Separate property may be held in the couple’s joint revocable living trust provided that the separate property is not commingled with the community property and the couple keeps track of the separate property asset apart from the community property assets held in the living trust.

Unlike the Bypass Trust, the amount of assets allocated to the Survivor=s Trust is not dependent on the amount available to be sheltered from estate tax.

million, the taxable portion of the estate will be million.This means that million will be taxed at 40% and the remaining amount will be transferred to the beneficiaries.Separate property may be held in the couple’s joint revocable living trust provided that the separate property is not commingled with the community property and the couple keeps track of the separate property asset apart from the community property assets held in the living trust.Unlike the Bypass Trust, the amount of assets allocated to the Survivor=s Trust is not dependent on the amount available to be sheltered from estate tax.To circumvent the estate from being subject to such steep taxes, many married couples set up a trust under their last will and testaments called an A-B trust.

After the death of an individual, his estate is taxed heavily before his beneficiaries receive it.

Once the allocation agreement has been prepared which identifies which assets of the joint trust are allocated to the Bypass Trust and which assets are allocated to the Survivor’s Trust, trust transfer deeds and certificates of trust with letters of instruction to the financial institutions are signed by the Surviving Spouse as the sole successor Trustee.

The trust transfer documents are then sent to the appropriate entities for processing.

After death, the sum of money equal to the estate tax exemption in the year that s/he dies is put in an irrevocable trust called the Bypass trust, or B trust. The remaining amount, million, will be transferred to a Survivor’s trust, or A trust, which the surviving spouse will have complete control over.

The estate tax on the A trust is deferred until after the death of the surviving spouse.

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