- Mark as New
- Bookmark
- Subscribe
- Permalink
- Report Inappropriate Content
As Google AI tells us, "A credit shelter trust, also known as a bypass trust or AB trust, is an estate planning tool used by married couples to maximize their estate tax exemptions by separating assets into two trusts upon the death of the first spouse, allowing for tax-efficient passing of wealth to beneficiaries."
Which was a good idea 20 years ago, but archaic for most couples now. So, which trust are you asking about? And who told you how the assets were divided?
Some couples were smart enough to include language, or amend the trust to state, "just put enough in the decedent's trust to keep the survivor from having more than the allowed exemption." Maybe that's what you have. Always read the trust. Often, it can all go into the survivor's trust, which still qualifies as a grantor trust.
Sometimes these arrangements were made, not to maximize the estate-tax exemption but to keep his half for his family and her half for her family.
Where are you finding capital gains, anyway? Just from the increase in value since date of death? Because it all gets stepped-up basis.