AB Trust

How an AB Trust Works:

Example: A couple owns property worth $20 million. Each partner’s share is $10 million.

How the Second Estate Can Cost Your Family Money

Scenario #1: No Planning

H dies in 2013, leaving $10 million to W.
Estate tax exemption = $5.25 million.
No estate tax.

W dies in 2014, leaving $20 million to the children.
Estate tax exemption = $5.34 million.
Estate tax = $5.864 million.

Scenario #2: AB Trust

H dies in 2013, leaving $5.25 million to the B Trust, for W to use and their children to inherit when W dies.
Estate tax exemption = $5.25 million.
No estate tax.

W dies in 2014, leaving $14.75 million to the children.
Estate tax exemption = $5.34 million.
Estate tax = $3.764 million.