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Gimme Credit Shelter Trusts

It's well known that a traditional IRA is a great way to save. Assets in an IRA can grow tax-deferred for decades. But tricky planning issues arise when a married couple has combined assets in excess of the estate tax exemption (currently, $3.5 million)1, but one or both of the spouses have insufficient assets outside of an IRA to fund a credit shelter trust (CST) fully. When that's the case, many

It's well known that a traditional IRA is a great way to save. Assets in an IRA can grow tax-deferred for decades. But tricky planning issues arise when a married couple has combined assets in excess of the estate tax exemption (currently, $3.5 million)1, but one or both of the spouses have insufficient assets outside of an IRA to fund a credit shelter trust (CST) fully. When that's the case, many estate planners question whether clients should use their IRAs to fund a CST at death, because

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