40 ab trust diagram
A-B Trust - Overview, Purpose, How It Works, Advantages The A-B Trust allows spouses to provide for the surviving spouse, as well as protect the estate tax (the “death tax”) exemption. In Canada, everyone is entitled to a combined federal gift tax and estate tax exemption of $5.43 million, so A-B Trusts attempt to combine the exemptions between married couples (i.e., $10.86 million in exemptions). The A-B Trust structure can also protect the assets of a deceased spouse so they transfer to the original beneficiary and cannot be tampered with by the surviving spouse. Basic Estate Planning - AB Trust - SmartDraw 2. Estate Tax Return is filed. 3. Trust "B" is funded. As of 2004, this trust may be funded up to the amount sheltered by an estate tax credit, which is $1.5 million. $3.5 million by 2009. 4. Trust "A" gets funded. At the surviving spouse;s death, Trust "A" and spouse;s assets are subject to estate taxes before going to children.
AB Trusts...