{"id":287069,"date":"2016-04-04T10:45:47","date_gmt":"2016-04-04T15:45:47","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/estate\/trusts\/ab-trusts-the-tax-saver.html"},"modified":"2025-07-24T12:25:00","modified_gmt":"2025-07-24T17:25:00","slug":"ab-trusts-the-tax-saver","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/estate\/trusts\/ab-trusts-the-tax-saver.html","title":{"rendered":"AB Trusts: The Tax-Saver"},"content":{"rendered":"\n
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AB Trusts: The Tax-Saver<\/h1>\n\n
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\n By Oni Harton, J.D.<\/a> | Legally reviewed by Aisha Success, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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An AB trust is an estate planning tool for married couples that helps maximize federal estate tax exemptions, benefiting the surviving spouse and beneficiaries.<\/p>\n\n <\/div>\n\n\n\n

If a person dies and passes along their estate using a\u00a0last will and testament<\/a>, the estate may be subject to estate taxes before the beneficiaries receive it. An AB trust is a trust created by and for married couples. It can maximize their federal\u00a0estate tax exemptions<\/a>\u00a0to benefit the surviving spouse and ultimate beneficiaries.<\/p>\n

If a person dies and passes along their estate using a\u00a0last will and testament<\/a>, the estate may be subject to estate taxes before the beneficiaries receive it. An AB trust is a trust created by and for married couples. It can maximize their federal\u00a0estate tax exemptions<\/a>\u00a0to benefit the surviving spouse and ultimate beneficiaries.<\/p>\n

In this article, learn more about how an AB trust can bring tremendous tax savings.<\/p>\n

How an AB Trust Works<\/h2>\n

Spouses can set up an AB trust. You need to know how one works to decide whether or not\u00a0this type of family trust is a good option for you. An AB trust not only helps your loved ones avoid\u00a0probate court<\/a>\u00a0but also can avoid costly estate taxes for couples whose assets exceed the federal exemption amount. Given the current\u00a0federal estate tax exemptions<\/a>, gift taxes and estate taxes only apply to the wealthiest Americans.<\/p>\n

An AB trust is a form of an\u00a0irrevocable trust<\/a>\u00a0that comes in two parts.<\/p>\n

Part I: Marital Trust<\/h3>\n

The first part of a marital trust, trust A, is a trust created when the first spouse dies. It is outlined by\u00a0a will<\/a>\u00a0or as part of a living trust.<\/p>\n

The\u00a0decedent’s<\/a>\u00a0separate property and share of community property transfer into the marital trust. This is to be used for the benefit of the surviving spouse. Due to the estate tax marital deduction, no estate tax is owed at the first spouse’s death, as the\u00a0first spouse used the estate tax exemption to transfer assets into the trust.<\/p>\n

This initial part of the AB trust is used to:<\/p>\n