credit shelter trust

Technical topics regarding tax preparation.
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My clients formed two inter vivos or living trusts back in 1999 when they had a sizeable combined estate between the two. At the time, the living trusts not only stated that each spouse would be the successor trustee, but also stated that upon death the surviving spouse would receive all properly in the trusts to a Credit Shelter Trust. At this point the estates have dwindled significantly and the decedent's spouse's trust only has about 300k in it. Now the brokerage company, Charles Schwab is indicating that the money can only come out after a Credit Shelter Trust is created, a tax IRS ID obtained, etc.

I understood the Credit Shelter Trust to have the purposes of making sure that the Estate Tax Exemption is allowed for the decedent spouse to offset any future estate tax after the surviving spouse dies; this will not be applicable.

I would like to see my client, the surviving Spouse step into the shoes of the decedent spouse as successor trustee and control and therefore liquidate the trust assets as he sees fit, or transfer those assets to his surviving inter vivos trust.

Any thoughts on this would be appreciated.
 

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