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Avraham "AY"  Rappaport, CLTC

President, Financial Professional


Yaniv "Jay" Natanov

President, Financial Planner


Eli Rappaport

Vice President, Financial Planner


Shlomo Rosenstein

Financial Professional


Ozzie Marizan

Financial Planner


Joseph Greer

Employee Benefits Administrator


Dylan Pinsky

Client Relations Manager


Premier Financial

6395 Dobbin Road, Suite 102

Columbia, MD 21045


Phone:  240-309-6001




May/June 2023

Do You Need a Trust?

mid adult couple meeting with agent

While trusts are often complex, they offer high net worth families and individuals tax advantages and more control over how their assets are distributed to future generations. One of the more common and effective trusts used to accomplish these twin goals is an AB trust, which is also known as a credit shelter or bypass trust. This type of trust begins as a revocable trust, when you can make changes, and ends as an irrevocable trust.

When families and individuals want to retain some control over how their assets are distributed after they’re gone while limiting the corrosive effect of estate taxes, any one of a variety of irrevocable trusts can accomplish this. Irrevocable trusts also shield assets named in these trusts from the public glare of probate court, while dictating how your estate will provide for family going forward.


Multiple Advantages
How does this trust work? Part A of the trust provides income to the surviving spouse. When the second spouse dies, Part B kicks in for the benefit of the second spouse’s estate and becomes irrevocable.

By dividing asset ownership among both spouses, the trust ensures the couple receives the maximum federal estate tax exemption, or credit, which in 2023 is $12.92 million per individual. This is key because a couple can lose part of one spouse’s exemption if they haven’t used it all.

While the estate can allow the surviving spouse to use the deceased spouse’s remaining exemption, it has some limits. The AB trust provides more control, but it doesn’t apply to the GST tax exemption and isn’t recognized by some states.

An AB Trust can offer control, maximize tax credits and help ensure that assets pass to beneficiaries as intended.

If you want to leave financial means to a spouse after your death while also ensuring other beneficiaries ultimately receive the remainder of tax-advantaged assets, the AB trust is one way to achieve this.

Consult an estate planning attorney and your tax and financial professionals to learn if this type of trust is appropriate for your situation.



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Premier Financial is not affiliated with Prudential Financial. Premier Financial sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Premier Financial is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Premier Financial and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Dylan Pinsky is employed by Eli Rappaport and not The Prudential Insurance Company of America or its subsidiaries.
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