FAQs: What Is A Credit Shelter Trust?

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FAQs: What Is A Credit Shelter Trust? | Attorney Mario Godoy | Lombard Estate and Probate Legal Group

A credit shelter trust is a legal way to minimize Illinois estate taxes. The money in the trust is held by a trustee for the benefit of whoever the beneficiary named in the estate. Illinois is one of 18 states with an estate tax that is lower than the federal limit. Estate planning lets you remove some assets from your taxable estate. Credit Shelter Trusts (CST), also called AB trusts, bypass trusts, exemption or family trusts, are revocable trusts that can be customized for your specific situation to protect your spouse from Illinois estate taxes.

A CST is created when an individual in a married couple dies and there is a serving spouse. The assets in the CST benefit the surviving spouse during their lifetime. Credit Shelter Trusts aren’t just for the wealthy: they can protect families with average assets from burdensome estate taxes.

5 Benefits Of Credit Shelter Trusts

There are many benefits to using a Credit Shelter Trust. CSTs can:

• Reduce Illinois and federal estate tax liability and protect your spouse and dependent children’s income

• Shields funds in the trust from the beneficiary’s creditors

• Protect your children’s inheritance if your spouse remarries, called portability

• Avoid the administrative headaches of some other types of trusts

• If Congress changes the federal estate tax, your assets are protected in the trust

It’s important to consult an experienced trusts attorney who understands Illinois and federal estate taxes to advise you on the best options to protect your loved ones.

DuPage County Trusts Attorney

Creating a trust is an essential part of many estate plans. By working with an attorney, you could draft a trust document that fits your goals now and in the future. If you think that a Credit Shelter Trust is right for you, contact one of our trusts and estates lawyers today and schedule an appointment at 630-864-5835. 

AREAS WE SERVE: Cook, Dupage, Kane, Lake, and Will counties