1. The maximum rate imposed for federal estate tax purposes is currently 40%. For the rates in prior years, see Tax-Related Planning.
  2. Internal Revenue Code § 2010(c) provides for an “applicable exclusion”, which is the cumulative amount that can pass free of gift and/or estate tax. The applicable exclusion was $5,490,000 in 2017 and is $11,180,000 in 2018. For the applicable exclusion in prior years, see Tax-Related Planning.
  3. This is available online at Your Duties as Trustees.
  4. Many trusts do not use the Trust A and Trust B designations, but it is still common to refer to these trusts as “A and B Trusts”. Memory aid: The survivor’s trust (Trust A) is for the spouse that is Alive, and the marital trust (trust B) is for the settlor that is Buried.
  5. Although this memo refers to the “Decedent’s Trust”, it may be named something else in your trust documents. Common names include “Credit-Shelter Trust”, “Bypass Trust”, “Exemption Trust”, and “Exclusion Trust”.
  6. This is the “applicable exclusion amount” that has not been used for lifetime gifts. The “applicable exclusion amount” is given in note 2 at the bottom of page 1.
  7. While Nevada’s domestic partnership laws give domestic partners exactly the same rights as married couples, current federal tax law does not recognize domestic partners as being married. Federal law does recognize same-sex marriages.
  8. If a QTIP Trust is used, the trust may be referred to as an “A/B/QTIP Trust” or an “A/B/Q Trust”.
  9. This type of trust gets its name because it is described in IRC § 2056(b)(5).
  10. The federal generation-skipping transfer tax (“GST tax”) is imposed at the highest rate imposed for federal estate tax purposes, which is shown in note 1. For 2011 and beyond, the GST exemption has been the same as the applicable exclusion for estate tax. (See note 2.)