Save time with our cheat sheets, fact sheets, checklists & books!

February 19, 2009

Credit Shelter Trust ( Bypass Trust)

Print

Credit Shelter Trust

Trust  established upon the death of the grantor

Definition

Trust  established upon the death of the grantor, designed to reduce federal estate taxes, by funding the trust with amounts up to the exclusion limit  on federal estate taxes.

Strategic estate planning with retirement plans  typically include designating the trust as the beneficiary to receive only amounts that would maximize tax benefits.

The strategy usually entails funding the bypass trust when the first of a married couple dies, using the assets of the deceased.

Referring Cite

Trust laws

Additional Helpful Information

    • PLR 9630034: relating to disclaimer using to fund trust
    • Tax Law Changes for Gifts and Estates and Trusts
More

Keep Learning

Applicable RMD Age

Applicable RMD Age The first year for which an IRA owner or plan participant must begin to take RMDs from their tax-deferred retirement account. RMDs

SIMPLE 401(k) Plan

Definition A SIMPLE 401(k) plan is a 401(k) plan established by a small business for it’s employees. Earnings accrue on a tax-deferred basis and distributions

Required Minimum Distribution (RMD)

Definition The minimum amount that must be withdrawn from retirement accounts, including qualified plans, 403(b) accounts, 457(b) accounts or IRAs, each year.  For retirement account

Required beginning date (RBD)

Definition The date by which a retirement account owner must begin distributing required minimum distribution (RMD) amounts from a Traditional,  SEP or SIMPLE IRA, a

Be among the first to know when

IRA Rules
Change