Skip to Content
Klenk Law

AB Trusts

What is an AB Trust?

An AB Trust is two different trusts used as part of their Estate Plan to minimize estate taxes. The married couple creates these trusts in Wills or Revocable Living Trusts. The “A Trust” often called the “Marital Trust“, “Marital Deduction Trust” or “QTIP” Trust holds and amount that the deceased spouse’s exemption cannot shelter from tax and the “B Trust” or “Credit Shelter Trust,” “Family Trust,” or “Bypass Trust” holds the amount that the deceased spouse’s exemption can shelter.

What is the Purpose of an AB Trust?

The AB Trust allows a spouse to provide for the care of the surviving spouse while preserving all death tax exemptions and providing shelter from the surviving spouse’s creditors and future spouses. The AB Trust can also be crafted to ensure that the assets pass to the deceased spouse’s children or family at the surviving spouse’s death, keeping them out of the hands of the second husband/wife.

How an AB Estate Plan Works:

  1. The couple has their Estate Planning Lawyer incorporate the necessary technical language into their Will or Revocable Living Trust.
  2. Assets are arranged to comply with the AB Trust plan.
  3. At the first spouse’s death, an amount that can be sheltered from estate tax pours into the Bypass or “B” Trust. The remainder pours into the Marital or “A” Trust.
  4. During the surviving spouse’s life, the assets in both trusts are sheltered from creditors and subsequent marriages.
  5. The “A” Trust is included in the surviving spouse’s estate, utilizing his or her estate tax exemption.
  6. The assets can continue in protective trusts for their children, sheltered from their divorces and creditors.

Typical Estate Questions About AB Trusts:

Here are some questions clients, beneficiaries, and Trustees ask:

Can I have more than one beneficiary in the AB Trust?

The B Trust can include beneficiaries other than the surviving spouse. For example, children are often included as beneficiaries.

How is the AB Trust different from the Marital Trust?

The “Marital Trust” is another term for the “A” Trust. The Marital Trust is a part of an AB Trust Estate Plan.

What are the Pros of AB Trust Planning?

Asset protection, estate tax avoidance and maintaining assets within the family.

What are the Cons to the AB Trust?

At the first spouse’s death, careful planning is required to follow the steps necessary to preserve the tax exemptions. Each trust is assigned a tax ID and must file a separate annual income tax return.

Is the AB Trust better than the Marital Trust?

The “Marital Trust” is another term for the “A” Trust. The Marital Trust is a part of an AB Trust Estate Plan. 

Reasonable Prices | Years of Experience | We Make Trusts and Estate Planning Easier

If you have any questions about AB Trusts or any other estate planning topics, please contact us to schedule a free consultation. For more than two decades Klenk Law has focused only on Estate Law. We’ve seen it all, and this experience allows us to explain complex estate law and planning techniques clearly and concisely. We make it easy for you to understand AB Trusts so you can make the best decisions for yourself and your family.

What Our clients are saying

Klenk Law Logo
Stars

Peter provided outstanding advice and preparation of a will and trusts.

Klenk Law Logo
Stars

Peter was excellent. He explained everything very clearly and is super friendly. My wife and I originally tried using a lawyer through group legal coverage, but unfortunately the old adage - "you get what you pay for" - applied to the other lawyer, and we decided to go with a real professional.

Klenk Law Logo
Stars

When it came down to picking the right attorney to handle my affairs, I knew right away it was this firm. From speaking to their secretary to speaking to Peter I knew I was making the right decision. After only a few mins Peter knew right away what I was looking for and handled all my questions professionally and even gave me great feedback that put my mind at ease. All that without even giving a single penny! So of course I hired him! So far so good...

Klenk Law Logo
Stars

AWESOME LAWYER! Peter Klenk is an exceptional attorney and a very nice person! Today I spoke with Peter about estate planning and was impressed with by his professionalism, cordiality, and attention to detail. I highly recommend Klenk Law for probates, wills, trusts, and other issues germane to estate planning!

Klenk Law Logo
Stars

Great friendly staff

Klenk Law Logo
Stars

Tremendous firm with bright, kind and tenacious people. Great representation for our family.

Klenk Law Logo
Stars

I'm totally satisfied with Klenk Law. Peter has a great legal mind with the personality of the guy next door.

Klenk Law Logo
Stars

Everything about my experience was a 10+! Peter and his staff made what I thought would be a difficult process easy and understandable. Every detail was handled correctly. No other firm could possibly do better than Klenk Law!

Klenk Law Logo
Stars

Peter and his staff are very responsive and always willing to help my clients and in a cost efficient manner.

Klenk Law Logo
Stars

Like another reviewer, I contacted Peter through his website using the free consultation link, for a question regarding PA inheritance taxes. The question was quite technical and difficult to explain, and the answer was nowhere to be found on the web. Peter grasped precisely what I was asking, and provided a clear, helpful response (with a touch of humor) the very next day.

Klenk Law Logo
Stars

Answered my question quickly and referred me to a colleague that could handle my problem

Klenk Law Logo
Stars

Mr. Klenk, quickly understood the circumstances presented and provided clear and concise advice. This advice provided me with the information I required to progress the case to my advantage.

Klenk Law Logo
Stars

Peter is excellent. I had a very complicated situation with my parents' estate planning and potential Medicaid needs. Peter was very knowledgeable in estate planning matters, able to define the best solution for the situation. Additionally, he was congenial and able to communicate effectively to my senior citizen parents the benefits of estate planning. He earned my trust, and more importantly, my parents' trust in a 45 mins consultation period. Highly recommend Peter. He is very easy to work with.

Klenk Law Logo
Stars

Peter recently gave a presentation about Wills & Trusts at my employer, and it was fantastic! He was extremely knowledgeable and provided valuable information to the group. People were very engaged and asked several questions, all of which Peter thoroughly answered. Personally, my husband and I have selected Peter to help us with our estate planning, and he has been very helpful in providing us with all of the information we need to provide a secure future for our family. Thank you, Peter!

Klenk Law Logo
Stars

Peter provided outstanding advice and preparation of a will and trusts.

Klenk Law Logo
Stars

Peter explained things in a way that was easy to understand. Everything was done in the time frame he said it. Could not have been better!

Klenk Law Logo
Stars

You & your staff are the best thank you for everything.

Klenk Law Logo
Stars

Peter and his staff handled all of our needs in a very professional and timely matter.

Klenk Law Logo
Stars

Peter Klenk made a complex subject understandable and allowed us to move forward with our estate planning. He was patient with our questions and creative in the solutions he proposed.

Klenk Law Logo
Stars

Peter explained a complex subject very clearly, helped us to decide the best approach to managing our estate and then made it very easy for us to execute the required documents. He will be a valuable resource for years to come and clearly has a great understanding of estate law that will lead to innovative solutions for us. I would unhesitatingly recommend him for estate planning.

Klenk Law Logo
Stars

Fantastic customer service. Very personable and most importantly they provide great explanations of what is required based on your individual needs. Highly recommend Klenk Law for anyone that needs to create a will and estate documents.

Klenk Law Logo
Stars

Always professional and very responsive. Everyone on the staff that I have worked with. I look forward to continuing our relationship.

Klenk Law Logo
Stars

Surprisingly easy

Klenk Law Logo
Stars

Affable...yet surprisingly cerebral estate planning atty. High marks all the way around.

Klenk Law Logo
Stars

Peter and his associates made things easy for us.

Let us put our expertise to work for you.

Free consultation within 24 hours.