A Disclaimer Trust (also called a Family Trust, Credit Shelter Trust, or Bypass Trust) is a type of irrevocable trust that gives a surviving spouse flexibility in estate tax planning.
When someone passes away, their surviving spouse can choose to "disclaim" or refuse a portion of the inheritance, which then goes into this trust instead of directly to them. This provides creditor protection and can help with estate tax planning by sheltering assets from future taxes.
The surviving spouse can decide whether to receive assets directly or disclaim them into the trust based on their specific situation at the time. If they choose not to use it, the trust simply won't be funded, and assets pass directly to them.
A Marital Trust is a type of sub-trust that benefits only the surviving spouse after one partner passes away. It's an irrevocable trust that gives the deceased spouse control over how assets are ultimately distributed. The trust terminates when the surviving spouse dies, and assets then go to the final beneficiaries as specified by the original trust creator.
The Joint Revocable Trust structure for estate plans created with wealth.com depends on the user’s selections during the drafting process:
Marital Trust Selected: The trust directs assets to be allocated specifically to the Marital and/or Family Trust.
No Marital Trust Selected: The document defaults to Disclaimer Trust provisions. This allows the surviving spouse to disclaim assets, which then flow into the Family Trust.