A marital trust is a way for couples to protect themselves from paying taxes on their assets should one of them die. It’s also known as an “A” trust. You might find this subject difficult to understand, as there are different types of this kind of trust. Our estate lawyer in Cary NC is here to help you better understand.
Marital Trusts | Estate Lawyer in Cary NC
When a marital trust has been established in a couple’s estate plan, they are able to take advantage of tax laws that allow assets to be transferred without being taxed. The property is deducted from the taxable estate of the deceased. Even if the property exceeds the estate tax exemption amount, the living spouse will not have to pay taxes.
They are able to do so under the unlimited marital deduction, which is a provision of the U.S. Federal Estate and Gift Tax law. Under the law, someone can transfer an unlimited amount of assets to his or her spouse without taxation.
Upon the death of a spouse, the assets are transferred into the trust. The surviving spouse has control of them until he or she dies, then it is passed on to the beneficiaries outlined in the plan.
There are several types of marital trusts that can be used depending on the couple’s situation. The most common is a credit shelter trust, which is also known as an AB trust. It works for couples who may have separate assets that are going to different beneficiaries. The surviving spouse still has control over the trust until he or she dies.
To learn more about marital trusts, stop by and visit with our blog again. We will talk about the various types of marital trusts. If you have questions or concerns, contact our estate lawyer in Cary NC.
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