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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 including 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. The need for this type of trust is lessened by the fact that now any part of the unified credit not used by the first spouse can be added to the credit of the second spouse. The Illinois estate tax has a lower tax free amount and the family trust is still useful to defer Illinois estate tax to the time of the second death. || Back
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Donald M.
Thompson * 55 W. Monroe #3950; Chicago, IL 60603 |
