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The Elder & Disability Law Center
Washington, D.C. • Tysons Corner, Virginia • Laytonsville, Maryland

Estate Planning

Credit Shelter Trusts

The Estate Planning lawyers at the Elder & Disability Law Center provide comprehensive estate planning advice and legal services to individuals and families in the Washington, D.C., area, Maryland, and Virginia. Please contact us for a consultation a credit shelter trust or any other estate planning option.

If you and your spouse’s gross estate is worth more than $2 million, you may be a candidate for a credit shelter trust, which can be used to minimize your estate taxes. Because spouses can pass an unlimited amount to one another upon death free from estate tax, the U.S. estate tax system looks to the spouse that is second to die.

Although any assets passed to a surviving spouse qualify for the unlimited marital deduction, when the surviving spouse dies all of his/her assets will be taxed before being passed to the beneficiaries, including any assets he/she inherited from his/her spouse. A credit shelter trust enables you to take advantage of your estate tax exemption by placing an amount equal to the exemption (currently $2 million) into a trust for the benefit of your spouse. If your $2 million exemption is not used upon your death, it is lost, and those assets will ultimately be taxed when your spouse dies.

Special language must be used in a credit shelter trust so that the assets will not be included in the estate of the beneficiary (i.e. the surviving spouse). Generally the surviving spouse is giving only limited powers to control the trust assets. You can set up the credit shelter trust to pay an income for life to your spouse, plus any amounts needed for health, education and welfare. After your spouse’s death, the assets in the credit shelter trust will pass to your heirs as the beneficiaries of the trust upon the death of your spouse.

An experienced Estate Planning attorney will be able to work out the details with you and help you decide if a credit shelter trust is a good choice for you. Contact an Estate Planning lawyer at the Elder & Disability Law Center for a consultation.

The Elder & Disability Law Center
1111 19th Street, N.W., Suite 760
Washington, D.C. 20036
phone: 202-452-0000
fax: 202-463-2757

Virginia Office
1950 Old Gallows Road
Suite 700, Tysons Corner
Vienna, VA 22182

Maryland Office
5515 Riggs Road
Laytonsville, MD 20882

The Elder & Disability Law Center, with its main office in Washington, D.C., also has offices in Tysons Corner, Virginia, and Laytonsville, Maryland. We serve clients throughout the District of Columbia, Maryland and Virginia, including Fairfax, Arlington, Prince William, Stafford, Fauquier and Warren counties, and the cities of Alexandria, Falls Church and Vienna in Virginia; and Montgomery, Prince George's, Howard and Anne Arundel counties, and the cities of Bethesda, Silver Spring and Annapolis in Maryland.