A Credit Shelter Trust, or as it is sometimes called, a “Bypass Trust,” Family Trust or “B Trust,” is an Irrevocable Trust designed to hold an amount that can be sheltered from death taxes.
The Credit Shelter Trust not only preserves the deceased person’s death tax credit, but it also shelters the assets from the surviving spouse’s creditors and future spouses. The Credit Shelter 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 surviving spouse’s next spouse.
Here are some questions clients, beneficiaries, and Trustees ask:
The Credit Shelter Trust preserves the deceased person’s estate and generation-skipping exemption, preventing the trust assets from being included in the surviving spouse’s and children’s taxable estate.
Asset protection, tax avoidance and the ability to keep assets within the family.
The trust has a separate tax ID number, so must file a separate tax return.
Yes, you are not limited to the family.
No, a Credit Shelter Trust often includes the children.
If you have any questions about Credit Shelter 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 Credit Shelter Trusts so you can make the best decisions for yourself and your family.
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