Surviving spouse’s trust refers to the trust controlled by the living spouse in an AB trust scheme. In an AB trust, a couple plans to split their assets into two trusts to limit the estate taxes incurred by their property before being given to the beneficiaries. The A trust is the surviving spouse’s trust, which contains a portion of the assets and allows the surviving spouse some control over the trust. The B trust must be irrevocable, uncontrollable by the surviving spouse, and can only benefit the surviving spouse in limited ways. Since the lifetime exclusion amount for estate taxes now is portable between spouses, this system may not benefit as many spouses. However, many still use the AB trust system to limit state estate taxes or to delay all estate taxes. For more information on AB trusts, click here.
[Last updated in April of 2022 by the Wex Definitions Team]