Backdating allocation of marital assets into survivor trust example of information in the left hand pane divorced dating

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One of the trusts that comes into existence upon the death of the first spouse of a married couple who have an A-B trust arrangement in their estate plan is called the Survivor’s Trust.

After the surviving spouse dies, only the assets in the A trust are subject to estate taxes.

The A trust contains the surviving spouse’s property interests, but s/he has limited control over the assets in the deceased spouse's trust.

However, this limited control over the B trust will still enable the surviving spouse to live in the couple's house and draw income from the trust, provided these terms are stipulated in the trust.

This is because the B trust uses up the estate tax exemption of the spouse that died first, hence, any funds left in the decedent’s trust will be passed tax-free.

As the decedent’s trust is not considered part of the surviving spouse's estate for purposes of estate tax, double-taxation is avoided.

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