Tax Avoidance
This may be created as a tax avoidance tool, and in such cases is called an AB trust, a credit shelter trust, or a bypass trust. In such situations, each spouse gives all of their property in trust to his wife and her husband, for life, with a remainder to children or grandchildren. This can be a living trust, also called an inter vivos trust, in combination with a marital life estate. Any person considering this estate planning vehicle should consult a trained professional, such as attorney.
The estate tax can be a major consideration for starting such a device. This is not currently an urgent issue, because of the temporary phase-out of the Federal estate tax in 2010. However, in 2011, the estate tax will revert to its previous tax rates.
Read more about this topic: Marital Life Estate
Famous quotes containing the words tax and/or avoidance:
“...many tax collectors and sinners were also sitting with Jesus.”
—Bible: New Testament, Mark 2:15.
“Tax avoidance means that you hire a $250,000-fee lawyer, and he changes the word ‘evasion’ into the word ‘avoidance.’”
—Franklin D. Roosevelt (1882–1945)