Tampa Bypass Trust Attorney
A bypass trust (also called an A/B trust because it blends two different types of trusts together to achieve a married couple’s goal) can be used in estate planning for high net worth couples whose combined assets are greater than $24.12 million. A bypass trust also provides a steady income for the surviving spouse, which comes from the principle of the A trust, for the remainder of their life. Additionally, by creating a bypass trust the surviving spouse can rest assured that their portion of the assets will not pass on to a potential future spouse if the surviving spouse decides to remarry. Instead, the assets placed in the A part of the A/B trust will go to their chosen beneficiaries—usually their children. The Tampa bypass trust attorney at Strategic Counsel Law Group, L.C. incorporates bypass trusts and other irrevocable trusts into our clients’ estate plans to maximize their wealth, shield their estate from taxes and creditors, and ensure that assets are distributed in accordance with the grantor’s wishes.
Why Create a Bypass Trust?
The federal estate tax exemption is $12.06 million for an individual and $24.12 million for a couple. Any amount over this will be taxed— at a rate of 40 percent if the excess is a million dollars or more. As such, married couples often look for ways to reduce their estate in order to leave more of their wealth to their children, grandchildren, and other beneficiaries. Creating a bypass trust is one of these methods. However, a bypass trust or A/B trust is only useful for couples whose combined estate is worth more than $24.12 million, or will likely be worth more than that by the time both spouses pass away.
How a Bypass Trust Works
Bypass trusts are used in conjunction with A trusts or “marital trusts.”
- B Trust (Bypass Trust)—When one spouse dies, their portion of the marital property is placed in a B trust. The assets in this trust are passed to the couple’s children (usually). They are not passed on to the surviving spouse. However, the surviving spouse can receive income from this B trust for the remainder of their life as long as they do not over benefit from it.
- A Trust (Survivor’s Trust)—The surviving spouse’s assets (and whatever leftover assets of the deceased spouse that surpassed the federal estate tax exemption) are placed in an A trust (marital trust). They have full control and access over this trust for the remainder of their lives.
The couple’s combined estate is then shielded from estate taxes (or the taxes will be reduced) when the second spouse dies. This leaves more left over for the couple’s beneficiaries.
Call a Tampa Bypass Trust Attorney Today
If you and your spouse wish to reduce your estate taxes and maximize the wealth you leave behind for your loved ones, call the Tampa bypass trust attorney at the Strategic Counsel Law Group, L.C. today. You can reach us at 813-286-1700 to schedule a free consultation.