Credit Shelter A-B Revocable Living Trust
(Premium Version)

About this Form Set

A Credit Shelter A-B Revocable Living Trust, also known as a Bypass Trust or a Family Trust, holds and manages the assets of two or more individuals, typically a married couple. The term "A-B" refers to the fact that the trust is divided into two separate parts, "A" and "B," which are created for the benefit of each spouse. The "A" trust is created for the benefit of the first one to die, and the "B" trust is created for the benefit of the surviving spouse. Each spouse can act as the trustee of their respective trust, or they can name a third party as the trustee. An A-B revocable living trust can provide a number of benefits, such as avoiding probate, reducing estate taxes, and providing for incapacity. This trust can also be used to protect the surviving spouse's assets and ensure that they are managed according to the terms of the trust.

What is the A-B Trust strategy, and how can it be used to minimize estate taxes?

One can minimize estate taxes using the A-B Trust strategy The grantor splits his or her assets into two trusts: the "A" trust and the "B" trust. The grantor funds the "A" trust with the estate tax exclusion amount, which is the amount of assets that beneficiaries can receive without incurring estate taxes. The grantor funds the "B" trust with the remaining assets. When the grantor passes, the "A" trust assets pass to the beneficiaries without incurring any estate taxes. In contrast, the "B" trust assets are subject to estate taxes but at a lower rate because of the tax-free assets in the "A" trust.

A-B vs. Shared Revocable Living: Why Choose the A-B Trust?

Five reasons explain why a married couple might opt for an A-B revocable living trust over a shared revocable living trust:

  1. Asset protection: An A-B revocable living trust can provide greater asset protection for the surviving spouse than a shared revocable living trust. The "B" trust, which is created for the benefit of the surviving spouse, can be structured to protect the assets from creditors, lawsuits, and the surviving spouse's future estate taxes.
  2. Tax savings: An A-B revocable living trust can provide tax savings by allowing the first spouse to die to use their unified credit and estate tax exemption to reduce the value of their estate. This credit and exemption can result in a lower tax bill for the surviving spouse.
  3. Control over asset distribution: An A-B revocable living trust allows the couple to have more control over the distribution of their assets after the first spouse's death. The "A" trust, which is created for the benefit of the first spouse to die, can be structured to provide for the surviving spouse's needs while also ensuring that the assets are ultimately distributed according to the couple's wishes.
  4. Incapacity planning: An A-B revocable living trust can provide for the management of the assets of an incapacitated spouse without the need for a court-appointed guardian. This can help to ensure that the incapacitated spouse's financial needs are met and that their assets are managed according to their wishes.
  5. Simplicity: An A-B revocable living trust can be simpler to set up and administer than a shared revocable living trust, particularly for couples with a large number of assets or complex financial affairs. It can also be less expensive to set up and maintain than a shared revocable living trust.

Product Description

This document set is not available for preview. It is available for purchase only. This comprehensive set of forms contains all documents that two individuals will need to establish jointly an A-B Revocable Living Trust. This kit was professionally drafted by highly skilled attorneys with substantial experience in the industry, who would charge between $1,800 to $3,500 to create a trust for a client using the same documents. The kit reads with the ease of understanding that non-legal expert consumers expect, yet it maintains the professional sophistication that our attorney customers demand.

To help you establish the trust, the kit includes a clear set of instructions. (You may also consult with our attorney staff toll-free or by email at no additional charge, in the event you require further assistance.)  The kit includes:

  1. Declaration of trust form (the primary instrument that establishes the trust)
  2. Property assignment form (to transfer property into the name of the trust)
  3. Pour-over last will and testament (to safeguard against a failed assignment of property into the trust)
  4. Trust amendment form (to amend the trust at a later date if necessary)
  5. Trust revocation form (to revoke the trust in its entirety at a future date if desired)
  6. Certificate of trust form (a summary overview document that certifies the existence and the authority of the trust to third parties, which helps to keep confidential the terms and beneficiaries of the trust)
Finally, the kit includes templates for Schedules A, B, C, D, and E, designed to facilitate listing of the property that will be held in the name of the trust, as well as the distributions to any beneficiaries, if desired.

In total, this professionally drafted kit is 20 pages in length (approximately 7,000 words) and prints on standard 8 1/2 x 11 paper.