A couple holds hands on a table while drinking coffee

When one spouse dies, the other may want to protect their assets from being divided up and going to probate. This is where an AB trust can be very useful. An AB trust, also called a "trust after one spouse passes" can help keep the assets of the deceased spouse intact for the benefit of the surviving spouse. In this blog post, we will discuss how an AB trust works and how it can be used to protect your loved ones!

AB Trust

An AB trust is a type of revocable living trust that divides the assets of one spouse (the deceased) into two separate trusts upon the death of one spouse.

“A Trust”

The first trust, known as the "A Trust," holds all of the deceased spouse's assets and provides for the surviving spouse. This allows the surviving spouse to use these assets during their lifetime without having to go through probate.

“B Trust”

The second trust, known as the "B Trust," holds any remaining assets and distributes them to beneficiaries after both spouses have passed away.

This type of trust can provide many benefits such as reducing estate taxes, avoiding probate costs, protecting against creditors in certain states, and providing tax savings opportunities. Additionally, an AB trust can help keep assets out of the hands of future spouses, which may be beneficial for financially independent individuals.

When setting up an AB trust, it is important to consult with a legal and tax professional who can provide advice about your specific circumstances. It is also important to understand that this type of trust does not guarantee all of your loved ones will receive their inheritance without any complications. There are many factors to consider when creating an AB trust and there is no "one size fits all" solution.

Ultimately, an AB trust can be a great way to protect your family's financial security while ensuring they get what you intended them to have upon your passing.

Our Team Can Help

At Legacy Enhancement Trust, our team of experienced professionals has helped many clients establish trusts to ensure their assets are divided properly in the event of death. We can provide you with the guidance you need to make sure your trust is set up correctly. Contact us today for more information.

Call Legacy Enhancement Trust today at (888) 988-5503 or fill out the online contact form to learn how we may assist you!

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