A marital life estate is, in the common law tradition of the United States and Great Britain, a life estate held by the spouse (husband or wife) or widowed spouse, for the duration of that spouse's life.
Video Marital life estate
Creation
The marital life estate may be created by operation of law, agreement, contract, will, deed, or court order, such as a divorce decree or judgment.
Maps Marital life estate
Tax avoidance
This may be created as a tax avoidance tool, and in such cases is called an AB trust, a credit shelter trust, or a bypass trust. In such situations, each spouse gives all of their property in trust to his wife and her husband, for life, with a remainder to children or grandchildren. This can be a living trust, also called an inter vivos trust, in combination with a marital life estate. Any person considering this estate planning vehicle should consult a trained professional, such as attorney.
The estate tax can be a major consideration for starting such a device. This is not currently an urgent issue, because of the temporary phase-out of the Federal estate tax in 2010. However, in 2011, the estate tax will revert to its previous tax rates.
See also
- Life interest
- Tenancy by the entirety
- Community property
References
Source of article : Wikipedia
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