Advanced estate planning focuses primarily on reducing transfer taxes and income taxes. Under current federal law, there are three taxes that are imposed on the transfer of assets: the gift tax, the estate tax, and the generation-skipping transfer tax ("GSTT"). Revocable trusts can be structured to reduce and/or defer the estate tax and the generation-skipping transfer tax, especially for married couples. In other words, revocable trusts can be used to defer estate tax for married couples upon the death of the first spouse to die through the use of marital-deduction trust planning and reduce or eliminate estate taxes for beneficiaries by establishing one or more "bypass trusts".
Tax Planning Trusts
Any two persons can create an "A/B Trust" or an "A/B/C Trust". This type of trust begins as a single revocable trust, but when one of the settlors dies, the trust divides into subtrusts.
"Trust A" remains revocable and contains the survivor's property interests, and the surviving settlor has total control. This trust usually receives all assets that exceed the applicable exclusion, and this qualifies for the marital deduction.
"Trust B" is irrevocable. This trust contains the deceased settlor's assets, and is designed as a bypass trust so that it can pass to the next generation of beneficiaries without triggering a transfer tax.
"Trust C" will also be established as an irrevocable trust, thus providing even greater creditor protection for the surviving spouse. The overflow (the excess not protected under the estate tax exemption amount) will flow over to the C Trust instead of A. At the death of the remaining spouse, this will pass to the heirs, along with "Trust B.".
Our Rating is calculated using information the lawyer has included on
their profile in addition to the information we collect from state
bar associations and other organizations that license legal
professionals. Attorneys who claim their profiles and provide Avvo
with more information tend to have a higher rating than those who do
What determines Avvo Rating?Experience & background
Years licensed, work experience, education
Legal community recognition
Peer endorsements, associations, awards
Legal thought leadership
Publications, speaking engagements
This lawyer was disciplined by a state licensing authority in .
Disciplinary information may not be comprehensive, or updated. We recommend that you always check a lawyer's disciplinary status with their respective state bar association before hiring them.