Making The Complex

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AB trusts in estate planning in Louisiana

Writing an estate plan can be a bit confusing. There are a lot of terms that likely aren’t too clear, but having some knowledge about what they mean may make estate planning decisions for Louisiana residents much easier and less time-consuming. For instance, many people might not be aware of what an AB trust is in an estate plan. An A trust is sometimes referred to as a marital trust or a marital deduction trust, while a B trust is sometimes called a bypass, credit shelter or family trust.

Changes in federal laws which came into play in 2014 meant married couples could pass on more than $10.6 million to heirs tax free without the need for AB trusts. That doesn’t mean these trusts have become dinosaurs. They are still needed in certain situations. For instance, if spouses have different beneficiaries, which may be the case if in a second marriage, they may each wish to leave their own children assets after each spouse has died. An AB trust can be used in these instances.

This type of trust planning minimizes couples’ estate taxes. There are also provisions when one spouse has more assets than the other. There is much information that goes along with these trusts and a lawyer may be the best place to begin when seeking out how these trusts may be beneficial.

An experienced Louisiana estate planning attorney will ensure that appropriate language is used when incorporating trusts into an estate plan. He or she will also be able to explain the particulars of these trusts and how they may benefit a client’s individual situation. He or she can also explain the tax benefits of various types of trusts and which may be most beneficial for a client.


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