Get A B Disclaimer Trust Form 2014-2024

A Disclaimer Trust is a type of estate planning Trust that allows a surviving spouse to “disclaim” the distribution of certain assets following their spouse's death. Instead of being distributed outright, these disclaimed, or refused to accept, assets are used to fund an irrevocable Trust.

The two basic trust structures are revocable and irrevocable. The biggest difference is that revocable trusts can be changed after they are created, while irrevocable trusts typically cannot.

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.

A Disclaimer Trust is a type of estate planning Trust that allows a surviving spouse to “disclaim” the distribution of certain assets following their spouse's death. Instead of being distributed outright, these disclaimed, or refused to accept, assets are used to fund an irrevocable 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.

The two basic trust structures are revocable and irrevocable. The biggest difference is that revocable trusts can be changed after they are created, while irrevocable trusts typically cannot.

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.

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.

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.

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.

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.

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 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.

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.

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 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.

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 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 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 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.

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

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.

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.