A-B Trusts - what are they??

[TK1469]

Can anyone explain to me the difference between an "A Trust" and an "A-B Trust" ?? Are they different trusts or a division of a single one? How are assets titled when you do this? HELP !!

 

[advisor10]

2-20-2002

DEAR TK:

They are subdivisions of the first trust. An A-B trust is also called a bypass trust (or a bypass subtrust) and is designed to protect a spouse and save on estate taxes for estates over $600,000.

You would need to clarify your situation by giving more details, or visit a local library to find a book about trusts and look in the index to see if bypass trusts/subtrusts are mentioned, in order to get more information on how they are set up.

SINCERELY,

advisor

 

[advisor10]

2-20-2002

DEAR TK:

They are subdivisions of the first trust. An A-B trust is also called a bypass trust (or a bypass subtrust) and is designed to protect a spouse and save on estate taxes for estates over $600,000.

You would need to clarify your situation by giving more details, or visit a local library to find a book about trusts and look in the index to see if bypass trusts/subtrusts are mentioned, in order to get more information on how they are set up.

SINCERELY,

advisor

 

[TK1469]

More Information

My wife and I will soon be setting up a Living Trust. The attorney that I have consulted with said that since our estate is close to $1 Million that we should consider 2 trusts to avoid Estate Taxes. I guess I'm assuming it is a A-B Trust. Would it be 2 separate ones? If so, how would you title the assets that are now jointly owned??

 

[advisor10]

2-21-2002

DEAR TK1469:

I regret that I do not know enough about trusts to be able to answer your questions. This type of question should actually be directed in 2 places (it always helps to get a second or third opinion when it comes to estate planning). You could ask any bank that has a trust department and the trust officer could advise you about the tax implications, as well as also asking a CPA or tax accountant, or an estate planning professional.

The freeadvice.com site might also have a separate message board that handles tax questions which you might also want to submit your question to.

SINCERELY,

advisor