Family
Trust/Credit Shelter Trust
This is a trust
created to contain no more assets than those that escape tax
under the unified credit. In other words it usually contains
no more than the tax free amount. To avoid inclusion in the
estate of the surviving spouse this sum cannot be given
outright to the surviving spouse. The surviving spouse can
be given a life interest in the income from it and even a
right to principal to be paid out according to an
ascertainable standard set forth in the trust. Since the
children are also often made beneficiaries, the trust is
sometimes called the family trust.
NOTE:
There currently is no Federal or state estate tax or
generation skipping tax. The gift tax is still in effect.
Whether or not the estate and generation skipping taxes
will be reinstated this year is not known. Many people
expect that they will be reinstated, but what will happen
is not known. What the rates and exemptions will be
if the taxes are reinstated is also not
known. Click
here for more.
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