Bypass the Bypass Trust?Bypass the Bypass Trust?
The bypass trust, also known as the credit shelter trust, the family trust and the trust, has been the foundation of estate planning for married couples since before I started practicing law. Prior to 2011, such a trust was necessary to ensure that the applicable exclusion amount of the first spouse to die wasn't wasted. Otherwise, if all of such spouse's assets were transferred to the surviving spouse
February 1, 2011
Deborah V. Dunn
The bypass trust, also known as the credit shelter trust, the family trust and the “B” trust, has been the foundation of estate planning for married couples since before I started practicing law. Prior to 2011, such a trust was necessary to ensure that the applicable exclusion amount of the first spouse to die wasn't wasted. Otherwise, if all of such spouse's assets were transferred to the surviving spouse in a manner that qualified for the marital estate tax deduction, they would be included in the surviving spouse's estate upon his death. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the 2010 Tax Act), however, introduced a new concept into the estate planning world: “portability” h...
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