If you don’t understand the differences between a will and a trust, it may cost your surviving spouse a great deal of money.
A Last Will & Testament
- If your estate is subject to estate taxes and you leave your property directly to your surviving spouse, he or she loses the multimillion dollar federal tax exemption.
- If you have a trust, the trust instructions can set up new trusts when you die, sometimes referred to as A/B Trusts.
The use of the A/B trust enables both you and your surviving spouse to claim their federal estate tax exemption allowance, potentially saving the estate hundreds of thousands of dollars. See the estate tax section for more information.