A-B Trust

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What is 'A-B Trust'

A trust created by a married couple with the objective of minimizing estate taxes. An A-B trust is is a trust that divides into two upon the death of the first spouse. It is formed with each spouse placing assets in the trust and naming as the final beneficiary any suitable person except the other spouse. The trust gets its name from the fact that it splits into two upon the first spouse's death – trust A or the survivor's trust, and trust B or the decedent's trust.

Explaining 'A-B Trust'

The surviving spouse has complete control over the survivor's trust, which contains his or her property interests, but has limited control over the assets in the deceased spouse's trust. However, this limited control over the assets in the decedent's trust will still enable the surviving spouse to live in the couple's house and draw income from the trust, provided these terms are stipulated in the trust. Upon the death of the surviving spouse, the property in the decedent's trust passes to the beneficiary(s) named in this trust. As this property is not considered part of the second spouse's estate for purposes of estate tax, double-taxation is avoided.

Trust, confidence and economic crisis
link.springer.com [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

Trust factor in construction alliances
www.tandfonline.com [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

Trends in park tourism: Economics, finance and management
www.tandfonline.com [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

Financial structure: an international perspective
www.jstor.org [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

Building consumer-to-consumer trust in e-finance marketplaces: An empirical analysis
www.tandfonline.com [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

Financing post-conflict recovery in Africa: the role of international development assistance
academic.oup.com [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

Trust and incentives in principal-agent negotiations: The 'insurance/incentive trade-off'
journals.sagepub.com [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

When does the general public lose trust in banks?
link.springer.com [PDF]
… cit.; B. R othstein , E. U slaner : All for all: equa- lity and social trust, in: LSE Health and Social Care Discussion Paper, Number 15, 2005, London School of Economics and Political Sci- ence … It makes less sense, however, to think about trust in such ab- stractions as “open …

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Q&A About A-B Trust

How does one create an A-B Trust?

One creates an "A" - "B" Trust by placing assets into it and naming as beneficiary any suitable person except for one's other spouse. This type of planning can be done through a revocable living trusts that allows you to have complete control over your own property while providing protection against creditors' claims against your property during your lifetime (and after). You may also use joint ownership with right of survivorship to accomplish similar objectives without creating a formal document such as a will or living trusts; however, if you do so without documenting your wishes then there could be confusion about who owns what when both spouses die at roughly the same time (for example if they were killed together in a car accident). Also note that using joint ownership with right of survivorship

When was the most recent release published?

The most recent release was published on March 16, 22.

How do you access these pages?

You can access these pages by visiting https://www.irs.gov/newsroom/.

What information does this page provide?

This page provides tax inflation adjustments for tax year 22 and 221.

What is an A-B trust?

An A-B trust is a trust created by a married couple with the objective of minimizing estate taxes.

Where can you find IRS news releases?

You can find IRS news releases on their website at https://www.irs.gov/newsroom/.

Who has control over the assets in each part of the A-B trust?

The surviving spouse has complete control over the survivor's trust, which contains his or her property interests, but has limited control over the assets in the deceased spouse's trust. However, this limited control over the assets in the decedent's trust will still enable him or her to live in their house and draw income from it, provided these terms are stipulated in this portion of their estate plan. Upon death, however, this property is not considered part of his or her estate for purposes of estate tax. Double taxation is avoided because upon death he or she passes on only his or her share to beneficiaries named in that portion of their estate plan.

What are the two parts of an A-B trust?

The two parts of an A-B trust are Trust A and Trust B.

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