Credit Shelter Trust - CST

Credit Shelter Trust - CST
A type of trust that allows a married investor to avoid estate taxes when passing assets on to heirs. The trust is structured so that upon the death of the investor, the assets specified in the trust agreement (up to a specified maximum dollar value) are transferred to the beneficiaries named in the trust (normally the couple's children). However, a key benefit to this type of trust is that the spouse maintains rights to the trust assets and the income they generate during the remainder of his or her lifetime.

This type of trust is also referred to as an "AB Trust".

In certain circumstances, such as the need to fund healthcare expenses, the surviving spouse may even tap into the principal of the trust assets, not just their generated income. When the surviving spouse eventually dies, the assets are transferred wholly to the beneficiaries (children) without any estate taxes levied. This can amount to significant tax savings and can be very valuable, especially considering that the surviving spouse essentially maintains full use of the assets while they are in the trust anyway.


Investment dictionary. . 2012.

Игры ⚽ Поможем написать реферат

Look at other dictionaries:

  • Economic Affairs — ▪ 2006 Introduction In 2005 rising U.S. deficits, tight monetary policies, and higher oil prices triggered by hurricane damage in the Gulf of Mexico were moderating influences on the world economy and on U.S. stock markets, but some other… …   Universalium

  • Alexandria, Louisiana — Coordinates: 31°17′34″N 92°27′33″W / 31.29278°N 92.45917°W / 31.29278; 92.45917 …   Wikipedia

  • Amarillo, Texas — Infobox Settlement official name = City of Amarillo settlement type = City imagesize = image caption = image mapsize = 250px map caption = Location within the state of Texas mapsize1 = 250px map caption1 = subdivision type = Country subdivision… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”