Trust Planning for Married Couples: Understanding A-B Trusts and Joint Revocable Trusts
Married couples often use a joint revocable trust as part of their estate plan. Upon the death of the first spouse, the trust will typically follow one of two paths: (1) it remains intact, with all assets continuing in a single trust, or (2) it divides into two sub-trusts—commonly known as the Survivor’s Trust and the Decedent’s Trust (also called a Bypass or Credit Shelter Trust).
For many couples, the decision to use a split trust structure—often referred to as an A-B Trust—is driven by goals related to estate tax planning and/or family planning, such as protecting assets for children from a prior marriage or preserving the deceased spouse’s wishes.
The key differences between a revocable trust that does not split and one that does split into a Survivor’s Trust and Decedent’s Trust upon the first spouse’s death are as follows:
- Trust Structure Upon First Death
- No Split Trust:
The trust remains a single, unified trust after the first spouse dies. The surviving spouse typically gains full control of all trust assets. - Split Trust:
Upon the first spouse’s death, the trust divides into two sub-trusts:- Survivor’s Trust – holds the surviving spouse’s share.
- Decedent’s Trust (Bypass or Credit Shelter Trust) – holds the deceased spouse’s share, usually irrevocable.
- Control of Assets
- No Split Trust:
The surviving spouse has full access and control over all trust assets, including the ability to amend, revoke, or use the funds freely. - Split Trust:
The surviving spouse controls the Survivor’s Trust but usually has limited access or no power to change or revoke the Decedent’s Trust, depending on how it’s drafted.
- Estate Tax Planning
- No Split Trust:
Generally less effective for estate tax minimization because the surviving spouse’s estate includes all assets, potentially increasing taxable estate. - Split Trust:
More tax-efficient for larger estates. The Decedent’s Trust can use the deceased spouse’s federal estate tax exemption, potentially shielding those assets from estate tax in the survivor’s estate.
- Asset Protection and Beneficiary Safeguards
- No Split Trust:
Offers fewer protections against the surviving spouse disinheriting children from a prior marriage or mismanaging assets. - Split Trust:
Decedent’s Trust can lock in the deceased spouse’s wishes, providing protection for intended beneficiaries and shielding assets from future spouses or creditors of the survivor.
- Complexity and Administration
- No Split Trust:
Simpler to administer after the first death; no need to allocate or value assets between sub-trusts. - Split Trust:
More complex, requiring asset valuation, allocation, and sometimes ongoing accounting and administration of the Decedent’s Trust.
Summary Table
| Feature | No Split Trust | Split Trust |
| Post-death Structure | Single trust | Two sub-trusts (Survivor’s & Decedent’s) |
| Surviving Spouse’s Control | Full control | Limited control over Decedent’s Trust |
| Estate Tax Planning | Less effective | More effective |
| Beneficiary Protection | Weaker | Stronger |
| Administrative Complexity | Low | High |
Take the Next Step in Securing Your Legacy
Whether you’re creating your first estate plan or revisiting an existing one, it’s important to ensure your choices reflect your current goals, family dynamics, and the latest tax laws. This is especially true for married couples, who may benefit from a Trust structure—such as one with or without an A-B split—depending on their specific needs. Every situation is unique, and there’s no one-size-fits-all approach. If you’re unsure which path is right for you, our experienced estate planning attorneys are here to help.
In Arizona? Contact us at 480-922-1010 or email info@bivenslaw.com today to schedule to schedule a consultation and take the next step toward peace of mind for you and your loved ones.
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