A-B Trust
An estate planning strategy where a married couple's trust splits into two trusts when the first spouse dies: Trust A (survivor's trust) and Trust B (bypass/credit shelter trust). This was designed to maximize estate tax exemptions for both spouses.
Legal Definition
A trust structure, also known as a bypass trust or credit shelter trust arrangement, that divides into a marital trust (Trust A) and a bypass trust (Trust B) upon the first spouse's death, designed to utilize both spouses' estate tax exemptions.
Practical Example
When the first spouse dies, their $13.61M exemption shelters Trust B assets from estate tax. The surviving spouse uses Trust A. This structure was essential before portability was enacted in 2011, and is still used in some plans.