Exemption Trust

What Does Exemption Trust Mean?
A trust whose purpose is to drastically reduce or eliminate federal estate taxes for a married couple's estate. This type of estate plan sets up an irrevocable trust that will hold the assets of the first spouse to die.

Investopedia explains Exemption Trust
The amount will not be taxed for federal estate tax purposes when the second spouse dies.

Related Terms

Estate Tax
Exempt Income
Irrevocable Trust
Trust
Unit Trust
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