Credit Shelter Marital Trust

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Commonly Asked Questions about Credit Shelter Marital Trust

Who is the beneficiary of a credit shelter trust?

The surviving spouse The surviving spouse can receive all of the income from the credit shelter trust. He or she can also have access to principal, ing to standards that you set. Maintaining the surviving spouses financial security is usually the trusts principal purpose. Credit Shelter Trusts and Portability Eagle Claw Capital Management info-resources cred Eagle Claw Capital Management info-resources cred

What is the advantage of a credit shelter trust?

A credit shelter trust is the perfect instrument to ensure a legally married couple passes their full estate tax exemptions on to heirs. Know, however, that this trust is revocable and will not offer any additional tax advantages beyond ensuring two full exemptions. Credit Shelter Trust: Use It or Lose It - The Hartford The Hartford business-trusts-101 cred The Hartford business-trusts-101 cred

What is the difference between a marital trust and a credit shelter trust?

The credit shelter trust (Trust B) is used to avoid estate taxes at first and second death by using the estate tax exemption of the first spouse to die while the marital trust (Trust A) takes advantage of the unlimited marital deduction to pass assets onto the spouse without estate tax at the first death.

Do credit shelter trusts get a step up in basis?

When the credit shelter trust is initially funded upon the death of one spouse, the assets that are placed under the trust receive a step-up in basis. This is an important consideration, because any assets held in a CST dont receive a second step-up in basis upon the death of the surviving spouse.

Does step-up basis apply to trusts?

Typically, assets you place in trust for your beneficiaries are eligible for a step-up in basis if the trust is revocable, and therefore considered part of your taxable estate. But with an irrevocable trust (which exists outside of your estate), trust assets do not receive a step-up in tax basis. A Step-Up in Basis and Why it Matters in Estate Planning - Eagle Strategies Eagle Strategies publicfiles Planning Eagle Strategies publicfiles Planning

Is a credit shelter trust the same as a QTIP trust?

No. Credit Shelter Trusts are a popular tool for estate planning, and there are two main types of CSTs, the Marital Gift Trust and the Qualified Terminable Interest Property Trust (QTIP). Both of these Trusts preserve wealth via estate tax exemptions.

What assets do not get a step-up in basis?

Assets that do not receive a step-up in basis when they pass to a beneficiary include: Bank accounts. Cash. Certificates of deposit. 401(k)s and other employer-sponsored retirement plans. IRAs. Pensions. Annuities. What is a step-up in cost basis and how can it affect me? Fidelity Investments personal-finance what-is-ste Fidelity Investments personal-finance what-is-ste