- quote -

use a will? how passe. Why have those assets go through probate?


See, the whole purpose of the bypass, or AB trust arrangement is to
- quote -

yes, and passing the B portion to the kids prior to the second parent's
death serves this purpose.

If your spouse does not need any part of the B trust,
- quote -

probate? More flexability in the trust document? One docuement, not two?
Maybe hold the B assets in trust for the kids' benefit, not the surviving
spouse, not necessarily giving it to the kids outright at the time of the
first death.


I guess the error would be in calling it an AB trust.. with
- quote -

maybe you need it, maybe you don't. If you do, it is still an AB trust.


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uh, no. If she retains a life estate in the house, it gets included in her
estate upon her death. Even if it is in the B trust.

Wait a sec.. is that right? The way the AB trusts that Ive seen are written
is that once one marriage partner dies, lets say the husband, his living
trust become irrevocable at that time.. .Then, the assets in his trust get
divided.. His trust still owns the assets, but the amount of the exclusion,
currently $2million comprises the B 'Family trust', while the balance goes
into the A 'Marital Trust'. Its the B side you are talking about.. Now, the
way they are usually set up, the trustee is responsible for among other
things, making sure the life beneficiary (surviving spouse) receives all the
income generated by both the A and the B trusts over her lifetime.. However,
while the contents of the B family trust do eventually go to the kids, they
are expressly prohibited from receiving them until the remaing spouse dies.
If your intention is to have the kids inherit the $2 million right away at
the time of the first spouses death, then why not just will it directly to
them? See, the whole purpose of the bypass, or AB trust arrangement is to
enable two marriage partners to BOTH take advantage of their UNified CRedit,
or Estate Exclusion. If your spouse does not need any part of the B trust,
then I dont see the point in creating an AB trust in the first place, when
the person who dies first can directly exclude $2 mil from taxation by
directing willing to the children, or wording the trust so that they get it
immediately.. I guess the error would be in calling it an AB trust.. with
the kind of arrangement youre asking about, you dont need it.

In my case, Im the successor trustee of my parents AB trusts.. my dad just
died, and his B family trust comprises the house which appraises to that
$2mil figure... But in my case, my mom lives in that house and will likely
stay there til she dies.. Hence, its a perfect setup for a true AB trust,
where I will forward her the income from teh A side, and the B side will
stay untouched until she dies in which case Ill sell the house, and benefit
from the full estate tax exclusion.

Paul


"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote in message
news:yUKph.696628$QZ1.449416[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -

"David" <david4731[at]hotmail.com> wrote in message
news:1168574981.689264.321710[at]a75g2000cwd.googlegroups.com...
- quote -

yes - write the trust document the way you want it, i.e. in your case that
the first-to-die's exemption amount is split in to a trust for the children.
Or, have that amount given to the kids directly, free of trust (yikes! - my
opinion)

If someone creates an A/B Revokable Living Trust, and a spouse
eventually dies, is there any way that the first half of the estate
(first $2,000,000 in tax year 2007 as an example) could go to the
children instead of the surviving spouse while the surviving spouse
keeps the 2nd half of the estate (or an amount over $2,000,000.00)
until they die? Or must the first half and 2nd half both go to the
surviving spouse and not go to any children where the surviving spouse
would then have the "personal choice" as to use any of the income from
the first half of the estate to help the children? I

The main point here is that if the 2nd half of the estate is enough for
the spouse to live on, is there any way to get the first half
(currently the first $2,000,000 in 2007) to go directly to the children
for their benefit? Or is there any way that the first 2,000,000 could
be in a trust where the income that those assets produce could be
specified to go to the children instead of the spouse directly?

I greatly appreciate any help on this matter.

Thanks,

-David