Why is an A/B Trust Important?

A married couple can have a Revocable Living Trust with provisions that upon the first spouse to die, the Trust shall be split into an A Trust, commonly referred to as the Survivor’s Trust; and a B Trust, commonly referred to as the Family Trust or Decedent’s Trust. In previous years there were huge federal estate tax advantages in splitting the original trust into two sub-trusts. If you die in 2014, the federal estate tax exemption is just over $5 million per person ($10 million a couple). How many estates do you think are valued over the exemption and are required to pay a tax to Uncle Sam? A very, very, small percentage.

Today there often is a misconception that due to the high federal estate tax exemption, there is not a need for a married couple to have a Revocable Living Trust with the A/B provisions. However, aside from the tax perspective, the A/B provisions allow approximately one-half of the estate to have asset protection for the surviving spouse against creditors, divorce and Medicaid spend-down.

Not all Revocable Living Trusts are written with the A/B trust provisions. If you are married, does your Revocable Living Trust have the asset protection for your surviving spouse after you pass away?

Why Choose Morris Hall:
You have a number of options when it comes to estate planning, so why pick Morris Hall?  First off, estate planning and asset protection are a very complicated endeavor and you should only trust someone who focuses exclusively on those matters.  Also, MH is a proud member of The American Academy of Estate Planning Attorneys (AAEPA) which provides us additional support, advanced training, tools and information that is not available to others – which means that we can better protect your assets and your loved ones.  We are one of only two firms in Arizona that belong to the AAEPA and are the only firm in New Mexico that has been granted membership.  If you have assets and loved ones that you want to protect, you are in good hands with MH.  Contact us today at 888.222.1328 to schedule an appointment!

This blog should be used for informational purposes only.  It does not create an attorney-client relationship with any reader and should not be construed as legal advice.  If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.