• AB trust is a joint trust created by a married couple; after the death of one of the spouses, the trust is divided into the survivor’s part (Trust A) and the bypass part (Decedent’s Trust or Trust B).

  • Through separation, the AB trust effectively minimizes inheritance taxes and defers them until the death of the surviving spouse.
  • The surviving spouse has limited control over the decedent’s trust, but the terms of the decedent’s trust may be set to allow the surviving spouse to access and even earn income from the assets.
  • AB trusts are no longer widely used as the estate tax exemption, now indexed for inflation, is sufficient for most states.