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  • A B Disclaimer Trust Form 2014

Get A B Disclaimer Trust Form 2014-2025

AB Disclaimer Trust: Is It For You? Updated 7/7/2008 The Law Firm of RICHARD O. BARNDT; E-Mail: RichardBarndt TrustAdvice.com; Website: www.TrustAdvice.com San Diego County: 6265 Greenwich Drive,.

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A major disadvantage of a bypass trust is the loss of the second income tax basis step up at the death of the surviving spouse for the assets in the bypass trust. When someone dies, the capital basis of the person's assets, with certain exceptions, is adjusted to the fair market value at the person's date of death.

The drawback of course to a plan like this is that the surviving spouse may decide not to execute a disclaimer and create the Disclaimer Bypass Trust and then later change the eventual beneficiaries of the trust. This risk is particularly apparent in plans involving remarried couples with children from prior marriages.

The four main types are living, testamentary, revocable and irrevocable trusts. However, there are further subcategories with a range of terms and potential benefits.

The biggest problem with Disclaimer Trust planning is that the surviving spouse often fails to make an effective disclaimer. If the surviving spouse doesn't seek counsel within nine months of the first spouse's date of death, or they transfer money into their own name, then an effective disclaimer cannot be made.

The downside to irrevocable trusts is that you can't change them. And you can't act as your own trustee either. Once the trust is set up and the assets are transferred, you no longer have control over them, which can be a huge danger if you aren't confident about the reason you're setting up the trust to begin with.

The most significant difference between “Disclaimer Trusts” and “A-B Trusts” is that with a Disclaimer Trust, any disclaimer is optional. On the other hand, with an A-B Trust, the deceased spouse's assets are disclaimed automatically. There is less flexibility when using an A-B Trust than a Disclaimer Trust.

An A/B/C Trust (sometimes referred to as a "Q-TIP" or "Qualified Terminable Interest Property" Trust) is similar to an A and B Trust in purpose and function. However, an A/B/C Trust is for married couples with estates that are clearly above the estate tax exemption amount.

A Bypass Trust is mandatory and must be created after the first spouse passes away. A Disclaimer Trust differs because it is voluntary. The surviving spouse can choose to disclaim some or all of the deceased spouse's assets and elect to create the Bypass/Disclaimer Trust.

The CST's benefits are obvious, but there are also downsides. First, the CST is expensive to form, typically requiring hefty fees to tax attorneys and accountants. Second, the CST effectively deprives the surviving spouse control of the deceased spouse's estate because the assets are now overseen by the trustee.

Disadvantages of an AB Trust The AB trust also limits the surviving spouse's rights to the trust property. A surviving spouse may feel entitled to all the property in the B trust, and may wish to spend the trust principle. This may conflict with the beneficiaries of the trust who wish to conserve the trust assets.

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© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232
Form Packages
Adoption
Bankruptcy
Contractors
Divorce
Home Sales
Employment
Identity Theft
Incorporation
Landlord Tenant
Living Trust
Name Change
Personal Planning
Small Business
Wills & Estates
Packages A-Z
Form Categories
Affidavits
Bankruptcy
Bill of Sale
Corporate - LLC
Divorce
Employment
Identity Theft
Internet Technology
Landlord Tenant
Living Wills
Name Change
Power of Attorney
Real Estate
Small Estates
Wills
All Forms
Forms A-Z
Form Library
Customer Service
Terms of Service
DMCA Policy
About Us
Blog
Affiliates
Contact Us
Privacy Notice
Delete My Account
Site Map
All Forms
Search all Forms
Industries
Forms in Spanish
Localized Forms
Legal Guides
Real Estate Handbook
All Guides
Prepared for You
Notarize
Incorporation services
Our Customers
For Consumers
For Small Business
For Attorneys
Our Sites
US Legal Forms
USLegal
FormsPass
pdfFiller
signNow
airSlate workflows
DocHub
Instapage
Social Media
Call us now toll free:
1-877-389-0141
As seen in:
  • USA Today logo picture
  • CBC News logo picture
  • LA Times logo picture
  • The Washington Post logo picture
  • AP logo picture
  • Forbes logo picture
© Copyright 1997-2025
airSlate Legal Forms, Inc.
3720 Flowood Dr, Flowood, Mississippi 39232