Credit Shelter Trust

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Prior to the enactment of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the 2010 Tax Act), a married couple generally needed to implement a credit shelter trust and, in non-community property states, divide their assets evenly between them, so that they could fully use both spouse's estate tax applicable exclusion amount (also referred to as an exemption).

The 2010 Tax Act provided for portability of a deceased spouse's unused applicable exclusion amount for 2011 and 2012 and the American Taxpayer Relief Act of 2012 (the 2012 Tax Act) permanently extended portability. For deaths occurring in 2011 and later, a surviving spouse may add their deceased spouse's unused applicable exclusion amount to the surviving spouse's estate tax basic exclusion amount without the use of the traditional credit shelter trust.

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