Complex Will with Credit Shelter Marital Trust for Large Estates - Hawaii 2025

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Additionally, assets that are placed in a credit shelter trust receive a one-time step-up in basis at the time the trust is funded.
One of the disadvantages of a credit shelter trust is that it does not give the surviving spouse immediate access or full control over the trust assets. Instead, the spouse can generally receive income from the trust and may be allowed to use the trust principal to pay for health, education, and maintenance as needed.
What happens to a living trust when one spouse dies is that it remains revocable until both spouses have passed away. A joint living trust will have a sub-trust called a survivors trust where the assets remain accessible and controllable by the surviving spouse.
Having a revocable trust in place can help you avoid probate, which is the process a court takes to finalize your legal and financial matters after your death. Probate can be lengthy and expensive for your loved ones. Estates in probate also become a matter of public record.
Credit Shelter Trust vs Marital Trust - Is a Marital Trust the Same as a Credit Shelter Trust? No. A Marital Trust is a type of Credit Shelter Trust. You and your spouse can use a Marital Trust to pass assets to a surviving spouse, children or grandchildren.

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When the surviving spouse dies, any remaining principal can be distributed to children or remain in trust for their benefit, as you direct. Even though the surviving spouse has access to income (and principal, if needed), the assets in the credit shelter trust are not considered part of the survivors taxable estate.
One such drawback is their irrevocable nature; once established, the terms are generally set and cannot be easily altered. The surviving spouses estate may also be subject to increased estate taxes upon their death, depending on the trusts structure and the value of the assets.

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