A-b trust, Financial Management

Assignment Help:

It is a trust developed by a married couple with the purpose of minimizing estate taxes. An A-B trust is a trust that splits into two on the death of the first spouse. It is produced with each spouse putting assets in the trust and naming as the final beneficiary to any appropriate person except the other spouse. The trust obtains its name from the fact that it divides into two upon the first spouse's death - trust A or the survivor's trust, and trust B or the decedent's trust.

The surviving spouse has total control over the survivor's trust, which holds his or her property interests, but has partial control over the assets in the deceased spouse's trust. Though, this restricted control over the assets in the decedent's trust will still allow the surviving spouse to reside in the couple's house and take income from the trust, given that these terms are fixed in the trust. On the casualty of the surviving spouse, the property in the decedent's trust transfers to the beneficiary(s) named in this trust. As this property is not considered part of the second spouse's estate for reasons of estate tax, double-taxation is ignored.

 

 


Related Discussions:- A-b trust

Importance of wbs in the project communication process, Due to the complex...

Due to the complexity of the tasks involved in many projects, communication of responsibility for those tasks is often helped by means of graphical planning techniques.

Calculate the cumulative probability , Compound options are usually cheaper...

Compound options are usually cheaper than vanilla options and we know that there are four main types of compound options: a call on a call; a put on a call; a call on a put; a put

What is unsystematic risks, Q. What is Unsystematic Risks? Unsystematic...

Q. What is Unsystematic Risks? Unsystematic Risks stems from a managerial inefficiency, technological change in the production process, availability of raw material, changes in

Define the common pattern of cash flows, What is the common pattern of cash...

What is the common pattern of cash flows for a share of preferred stock? How does the market define the value of a share of preferred stock, specified these promised cash flows?

How will you conclude the cost of capital, Q. How will you conclude the cos...

Q. How will you conclude the cost of capital from different sources? Ans. Implication of Cost of Capital: - Cost of capital of a firm is the least rate of return expected by it

Federal funds rate, Federal Funds Rate The interest rate that Amer...

Federal Funds Rate The interest rate that American banks that have funds in excess of the needs dictated by the Federal Reserve use to make overnight loans to banks whose

Theoretical spot rates, The theoretical spot rates for treasury secur...

The theoretical spot rates for treasury securities represent the appropriate set of interest rates that should be used to value the risk from default-free cash fl

Expects the per capita expenditure, Expects the per capita expenditure: ...

Expects the per capita expenditure: A township expects its population of 5,000 to grow annually at the rate of 5%. The township currently spends $300 per inhabitant, but, as t

Explain the risk of the capital asset pricing model, Discuss risk from the ...

Discuss risk from the perspective of the Capital Asset Pricing Model (CAPM). The Capital Asset Pricing Model, or also known as CAPM, can be employed to calculate the suitable req

Valuation and exit - hedge fund, Valuation and Exit Valuation: The Net ...

Valuation and Exit Valuation: The Net Asset Value is used as a base for ascertaining the prices applicable to investor subscriptions and redemptions. Fund administrator perform

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd