Credit shelter trust
Certified Financial Planner glossary · Certified Financial Planner
Definition
A trust funded at the first death with the decedent’s basic exclusion amount, removing subsequent appreciation from the survivor’s estate.
Credit shelter trust in plain English
At the first spouse's death the estate funds a trust with the decedent's unused basic exclusion so later growth never reenters the survivor's estate. That credit shelter trust (bypass trust) parks the exclusion amount outside the survivor's taxable estate while often still allowing income or HEMS access. Portability reduced the urgency for some couples, but appreciation shelter and remarriage protection still matter. Do not confuse it with a marital QTIP that is designed to be included later.
Practice Credit shelter trust
Which statement correctly identifies a binding constraint or trade-off in this decision?
Related Certified Financial Planner terms
Certified Financial Planner practice questions · Certified Financial Planner flashcards · Certified Financial Planner study guide