Legal Question in Wills and Trusts in Texas

Credit shelter trusts, generally speaking, are rather prevalent in estate planning done prior to recent federal estate tax legislation. You should be advised that as a result of this new legislation, many estate planners are altering plans in order to defer, minimize or avoid imposition of any federal estate tax. A good number of plans established before the changes could yield results today that are not what the testator or the estate planner intended. You need to visit with a probate attorney.

In a nutshell, credit shelter trusts would ordinarily be funded with the amount of money that a person could pass at their death to anyone other than their spouse. For years, these trusts were funded with the amount that generates zero taxes due. The remainder would pass to the surviving spouse, as there is an unlimited deduction to spouses. The very term "credit shelter" describes what the trust was designed to do -- shelter that credit amount so that it could be passed without any estate tax owing. Many estate plans gave the surviving spouse the right to use the funds of this trust for the rest of their life, and then the funds would pass to the children.

It sounds as though your father is dealing with some tax issues, and it isn't clear whether or not he has the advice of an attorney or a CPA. He needs to, and you need to acquaint yourself with the situation as well. Do yourself a favor and visit with a real person to provide them with real information. Free insight and information online is great, but it isn't what you're looking for in this case.