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TAX SHELTER MARITAL DEDUCTION AND
BYPASS TRUSTS These are trusts commonly referred to as A-B or marital-family trusts and are established to minimize death taxes by maximizing the use of the then current lifetime exclusion and the unlimited marital deduction. For the years 2000 and 2001 the lifetime exclusion is $675,000. See the article under FEDERAL ESTATE TAXES for more information. The benefits of using the tax shelter is that the deferred death taxes allow for increased planning opportunities which will result in lower estate taxes paid after the death of a surviving spouse, i.e. the death of the second spouse. Some of the concerns are that a surviving spouse may not feel comfortable dealing with a Trustee. A reassuring fact is that children’s share of the deceased’s estate can be protected in the event of a subsequent marriage of the surviving spouse. Tax advantages are that it minimizes federal estate taxes by deferring their payment for as long as possible. See the article under FEDERAL
ESTATE TAXES for examples on how the tax shelter trusts works. Ó 2000 James
W. Pearson, Jr., All Rights Reserved FOR ADDITIONAL INFORMATION CALL THE TOLL FREE HELP LINE 1-800-232-1477 E-mail: lawyer@lawwalk.com JAMES
W. PEARSON, JR. Chair of the Federal & State Credit Union Department & Coordinator of legal consultations under the Family Legal Care Plans offered to credit union members. |
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