Marital life estate

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A marital life estate is, in the common law tradition of the U.S. and Great Britain, a life estate held by the spouse (husband or wife) or widowed spouse, for the duration of that spouse's life.

Creation[edit]

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[edit]

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 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[edit]

References[edit]

  1. ^ Article from Inc. regarding life estates, including marital
  2. ^ Nolo definition
  3. ^ Grand Times web site
  4. ^ Although the article from Inc., cited below, and the Nolo web cite, also cited, seem to discourage seeking legal advice.
  5. ^ LaGrnage law firm web site
  6. ^ Cite needed from U.S.C.A. or other reliable source.