A form of bypass trust limited to an amount no larger than the personal federal estate tax exemption for the year of death; the personal exemption protects this property from the estate tax. Additional property is directed to the surviving spouse, and is shieded by the marital deduction.
Definition from Nolo’s Plain-English Law Dictionary
A bypass trust funded with an amount no larger than the personal federal estate tax exemption for the year of death. If the trust grantor leaves property worth more than that amount, it usually goes to the surviving spouse. The trust property passes free from estate tax because of the personal exemption, and the rest is shielded from tax under the surviving spouse's marital deduction.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:16 pm