When a couple begins planning to manage and pass on their assets after death, they may assume they must do so through a simple will. However, some couples may benefit from creating an A/B will-testamentary trust instead. A/B trusts can offer significant tax advantages and the ability to protect wealth. But how do A/B trusts differ from simple wills, and which option should you and your spouse choose for your estate plan?
What Is a Simple Will?
A simple will is a straightforward document that allows a person to direct how they want their assets distributed after death. A person can use a simple will to name someone to serve as executor of their estate. Parents of young children can also nominate a guardian for their children in case both parents pass away.
What Is an A/B Trust?
An A/B trust is an estate planning tool available to married couples to help minimize estate taxes. A married couple can form an A/B trust as a joint trust, placing their combined asset into the trust. Upon one spouse’s death, the trust splits into two portions:
- The “A” trust, also called the survivor’s trust, which receives the portion of the couple’s wealth beyond the lifetime federal estate tax exemption.
- The “B” trust, also called the decedent’s trust, which receives a portion of the couple’s wealth up to the lifetime federal estate tax exemption.
The surviving spouse retains full control over the A trust. Although the surviving spouse has limited, if any, control over the decedent’s trust, the B trust can make distributions to the surviving spouse during the surviving spouse’s lifetime. A/B trusts, therefore, effectively defer estate taxes until the death of the surviving spouse, at which point the couple’s assets pass to their intended beneficiary or beneficiaries.
Differences Between Simple Wills and A/B Trusts
Simple wills and A/B trusts work very differently. Some of the key differences between the two include:
- Probate: A simple will must go through probate to distribute a decedent’s assets. A/B trusts pass assets to surviving spouses and beneficiaries without the need for probate.
- Estate tax exposure: A simple will provides no estate tax benefits, whereas A/B trusts allow spouses to leverage both of their lifetime estate tax exemptions and defer taxes until after the surviving spouse’s death.
- Control after death: A simple will allows an individual to direct how their assets will pass after their death. With an A/B trust, the deceased spouse can set terms for the B trust but cannot control how their surviving spouse manages the A trust.
- Cost and complexity: Creating a simple will is usually cost-effective, whereas setting up an A/B trust often involves higher costs and greater complexity.
When Does an A/B Trust Make Sense?
A/B trusts make the most sense for couples whose combined wealth exceeds the federal lifetime estate tax exemption ($15 million as of 2026, adjusted annually for inflation), as A/B trusts can help mitigate federal estate taxes. Couples in their second or subsequent marriage might also consider A/B trusts, which can ensure that spouses’ children from prior relationships receive inheritances.
When Might a Simple Will Be Enough for You?
Couples who do not own substantial wealth might not need the complexity of an A/B trust and could instead use a simple will to direct the distribution of their assets to their children or other beneficiaries. Couples who prefer simplicity and lower cost in estate planning may also favor simple wills.
Texas-Specific Considerations
Families in Texas do not need to worry about paying estate taxes at the state level. Unlike the federal government, Texas does not levy estate taxes. However, Texas’s unique community property laws may create complexities for couples considering creating A/B trusts.
Contact an Estate Planning Lawyer Today
When you and your spouse decide to create estate plans, you have several legal strategies to choose from. Contact Carroll Law Group, PLLC today for a free, confidential consultation with an estate planning attorney to learn more about the differences between simple wills and A/B trusts and to discuss which estate planning option makes sense for you and your family.