Definition: AB Trusts are used by married couples to maximize their use of the federal estate tax exemptions of both spouses. When the first spouse dies, that spouse's Revocable Living Trust or Last Will and Testament provides that their assets will be divided so that the current amount exempt from federal estate taxes will be placed into a subtrust, referred to as Trust B, and anything over the exemption will be placed into another subtrust, referred to as Trust A.
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
Also Known As: A Trust = Marital Trust, Marital Deduction Trust, QTIP Trust; B Trust = Bypass Trust, Credit Shelter Trust, Family Trust
