The Curse of the A/B Trust

Member Presentation by Jennifer Martin

Clients make estate-planning choices that make estate administration difficult, expensive and

time-consuming.

I strongly recommend to most clients that they eliminate their A/B trust structure. They

made sense when we needed to value assets when the first spouse passed away in order to

keep them under the estate tax exemption. But, with the exemption at $11.58 million per

person, most people don’t need a rigid A/B structure. A more flexible trust structure

allows the surviving spouse to live comfortably and adjust to changing circumstances,

while still passing property to the children when the surviving spouse dies.

I also strongly recommend to most clients that they appoint a single successor trustee, not

co-trustees. Having two people in charge breeds conflict. A parent’s death creates:

For most people, a single trustee will prevent conflict, not cause it.

Finally, I strongly recommend to most clients that they don’t try to control their estate

from beyond the grave. Your successor trustee should be someone you trust with your

money and wishes. So, if you don’t feel comfortable giving them discretion over

the management of your assets, so they can adjust to changing circumstances, you should

probably appoint someone else. For most people, maximizing trustee discretion also

maximizes the value of the trust for their beneficiaries.

Let’s banish the ghosts of the A/B trust, co-trustees, and restrictive trust terms! Your

beneficiaries and your estate attorney will thank you.

About Jennifer Martin

Jennifer Martin is a partner at JARRATT MARTIN LAW, LLP, an estate

law, mediation and family law firm in Pleasanton. Her practice focuses on

estate planning, probate and trust administration, contested probate

litigation, conservatorships and business succession planning.

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