While "portability of the federal estate tax exemption" between married couples has led some to believe AB Trust planning is no longer necessary, there are many circumstances where this type of planning may still be required, such as in second marriages or where there is a large age difference between spouses. In addition, since none of the states that collect a state estate tax have adopted portability of the estate tax exemption at the state level, couples who live a state that collect a state estate tax still need to use AB Trust planning to minimize state estate taxes and may be able to use ABC Trust planning to defer payment of all estate taxes (federal and state) until after the death of the second spouse to die.
Trust A is also commonly referred to as the Marital Trust, Marital Deduction Trust, or QTIP Trust.
Trust B is also commonly referred to as the Bypass Trust, Credit Shelter Trust, or Family Trust.
Other Terms Beginning With A