Is the Bypass Trust Obsolete?

William H. Byrnes and Robert Bloink recently published an article that discusses how the Deceased Spouse Unused Exclusion Amount (DSUEA) not only makes bypass trusts unnecessary, but may even hurt an estate's beneficiaries by reducing the basis of assets they receive from the bypass trust.  However, the article also discusses how there are situations where the Marital Deduction/Bypass Trust combo (also called A-B Trusts) may be appropriate in light of the new estate tax.  A-B Trusts can be used for purposes other than estate tax planning, including protecting trust assets from the surviving spouse's creditors and offering the first spouse to die a degree of control over the final disposition of trust assets.

See William H. Byrnes and Robert Bloink, The Bypass Trust is Obsolete: Now What?, AdvisorOne.com, September 8, 2011.

Posted by William Alan Nelson II, Associate Editor, Wealth Strategies Journal