As the lifetime estate tax exemption has risen, estate planners have found themselves enjoying greater breathing space when optimizing the amount of wealth that can pass to an estate\u2019s heirs tax-free. In 2014, estate tax protection covers $5,340,000 per person. While the steadily larger exemption has seemingly made so-called \u201cbypass trusts\u201d less relevant, such trusts actually still have a valuable potential place in estate planning.<\/p>\n
A bypass trust (also known as a credit shelter trust or AB trust) allows a person to divide an estate into two trusts \u2014 one trust containing up to half of his or her federal estate tax exemption at the time of death, and the second containing the remaining portion. Alternatively, the surviving spouse could receive the entire estate, but such an option wastes the exemption for the deceased spouse; assets above the exemption are subject to federal tax.<\/p>\n
With the use of a bypass trust, the surviving (more…)<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":" As the lifetime estate tax exemption has risen, estate planners have found themselves enjoying greater breathing space when optimizing the amount of wealth that can pass to an estate\u2019s heirs tax-free. In 2014, estate tax protection covers $5,340,000 per person.…<\/span><\/p>\n