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Credit shelter trusts are created after the first spouse dies. Assets are passed tax-free to other beneficiaries after the second spouse dies. How Does a Credit Shelter Trust Work?
The "credit shelter trust" generally only works for married couples since (a) the tax code provides the opportunity to shift assets between married persons for an unlimited amount by means of the unlimited marital deduction; and (b) unmarried persons attempting to do the same would be impacted by the "gift tax" during life.
It also served to reunify the estate tax credit (aka exemption equivalent) with the federal gift tax credit (aka exemption equivalent). The gift tax exemption is equal to $5,250,000 [ 32 ] for estates of decedents dying in 2013, and $5,340,000 for estates of decedents dying in 2014.
Credit shelter trusts These trusts allow both spouses to take full advantage of their estate tax exemptions, which in 2024 is a whopping $13.61 million per person, or $27.22 million per married ...
Credit shelter trust: This kind of trust is designed to greatly reduce or even eliminate estate taxes when a surviving spouse dies and passes assets from the marriage onto children or other ...
The beneficiaries of a trust are the beneficial owners of equitable interests in the trust assets, but they do not hold legal title to the assets. Thus this kind of trust fulfills the goal of asset protection planning, i.e. to insulate assets from claims of creditors without concealment or tax evasion.
Also, it may provide shelter for assets from creditors. Trust beneficiaries may also have to deal with tax repercussions too. Depending on trust, money or assets, and the estate laws within the ...
The Gramm–Leach–Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub. L. 106–102 (text), 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999–2001).
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