A/B Trust

The A/B Trust is a type of Revocable Living Trust often used by married couples, wherein two trusts (i.e., trust A, also known as the “marital deduction trust”, and trust B, also known as the “credit shelter trust”) are created upon the death of the first spouse. By distributing the couple’s estate into two trusts when the first spouse dies, each spouse can, in theory, pass the maximum amount of property allowed to avoid federal estate taxes.