[p99guy]

The second type of trust you can do with Quicken is called an "AB" trust



2. The Estate Tax-Reducing AB Trust
The second kind of trust you can make with Quicken WillMaker Plus is an "AB" or bypass trust, which lets married couples avoid both probate and federal estate tax.
Estate tax is not a concern for most people. The tax is levied on the property you own at your death -- but a large amount of property is exempt from taxation. Currently, that amount is $2 million, which means that most people don't need to worry about estate tax. The exemption amount is scheduled to keep rising until 2010, when the estate tax vanishes completely. But there's another wrinkle: Unless Congress reauthorizes these changes, the estate tax will automatically reappear in 2011, with an exempt amount of $1 million.

If you're married, estate tax is most likely to be an issue when the second spouse dies. (When the first spouse dies, everything left to the survivor passes tax-free.) But if the second spouse owns all the couple's property, and it's worth more than the estate tax exemption, estate tax will be due. If that's the case, it's worth doing some tax planning, because the tax is steep.

With an AB trust, you leave property first to your spouse (in trust, with certain restrictions) and then to your children. Because the second spouse never legally owns the deceased spouse's property, her estate won't owe tax on it at her death. With a special kind of AB trust called a disclaimer trust, the surviving spouse decides, after the first spouse dies, whether or not to create the tax-saving trust. A disclaimer trust can be useful for couples who aren't sure whether or not estate tax will be a concern for the surviving spouse. For more about whether an AB trust is right for you, see Chapter 14.