Marital life estate
From Wikinvestor
A marital life estate is, in the common law tradition of the U.S.nd [[Great Britain, a life estate held by the spouse (husband or wife) or widowed spouse, for the duration of that spouse's life.
Contents |
Creation
The marital life estate may be created by operation of law, agreement, contract, will, deed, or court order, such as a divorce decree or judgment. [1]
Tax avoidance
This may be created as a tax avoidance tool, and in such cases is called an AB trust, a credit shelter trust, or a bypass trust. [2] In such situations, each spouse gives all of their property in trust to his wife and her husband, for life, with a remainder (law) to children or grandchildren. This can be a living trust, also called an inter vivos trust, in combination with a marital life estate. [3] Any person considering this estate planning vehicle should consult a trained professional, such as attorney.[4]
The estate tax can be a major consideration for starting such a device. This is not currently an urgent issue, because of the temporary phase-out of the Federal estate tax in 2010. [5]. However, in 2011, the estate tax will revert to its previous tax rates.[6]
See also
References
- ↑ Article from Inc. regarding life estates, including marital
- ↑ Nolo definition
- ↑ Grand Times web site
- ↑ Although the article from Inc., cited below, and the Nolo web cite, also cited, seem to discourage seeking legal advice.
- ↑ LaGrnage law firm web site
- ↑ Cite needed from U.S.C.A. or other reliable source.
