A credit shelter trust is an estate-planning strategy for married couples. This type of trust may provide control over the assets for the creator of the trust and tax efficiency for the surviving spouse and beneficiaries. It is also sometimes known as a bypass trust or family trust.
A credit shelter trust allows you to set aside a certain portion of your assets upon your death. There are a variety of reasons to discuss a credit shelter trust with your estate-planning attorney.
Control over assets
The spouse who sets up the trust can determine how the assets will be distributed. The surviving spouse can receive income and principal from the trust during his or her lifetime. When he or she passes away, the remaining amount in the trust goes to the beneficiaries designated by the spouse who created the trust.
This type of trust can be helpful in cases where the creator of the trust wants to control the distribution of the assets after his or her death. This is common with second or later marriages, where the creator of the trust has his or her own children and would like for them to inherit their separate assets.
Creditor claims protection
A credit shelter trust can help protect assets from claims by divorcing spouses, spouses from subsequent marriages and creditors. Generally, creditors cannot access the principal in the trust to meet their claims against the trust beneficiaries.
Federal estate tax exclusion
A credit shelter trust allows a married couple to benefit from the federal estate tax exclusion of the first spouse to die so trust assets are sheltered from future estate tax. Any growth or appreciation of those assets while in the trust is similarly protected from estate tax.
A portability provision gives married couples a chance
to save an unused exclusion amount without a credit
shelter trust (see “Federal Estate Tax and Portability” in
the blue section to the right). However, assets passed via
portability are not protected from generation-skipping transfer (GST) taxes, nor do they have the control or creditor protection advantages of a credit shelter trust.
State estate tax exclusion
Several states have their own state estate tax in addition to the federal estate tax. A credit shelter trust may be the only option to use the state estate tax exclusion of the first spouse to die.
Federal estate tax and portability
The American Taxpayer Relief Act of 2012
updated the federal estate tax exclusion amount
and provided for occasional increases to offset
inflation. The Tax Cuts and Jobs Act enacted in
2017 made increases to the exclusion amount
through 2025. In 2024, you may be able to transfer
up to $13.61 million (up from $12.92 million in
2023) at your death free from federal estate tax.
Any amount exceeding the exclusion can be taxed
up to 40%.
The portability provision states that when a person passes away, the surviving spouse may “retain” the deceased spouse’s unused exclusion amount. For instance, if a husband dies in 2024, his wife may be able to use their full $27.22 million exclusion (up from $25.84 million in 2023) without planning for it. There are certain tax-filing requirements that must be satisfied to take advantage of this option. You should talk with your qualified tax advisor about your situation.
Proactive planning can help ensure you have control over your estate and benefit from tax- saving strategies.
You may think the portability provision means you don’t need to plan to protect your legacy and reduce estate tax; however, that may not necessarily be the case. Although portability, in some situations, may provide advantages to some married couples, considering a credit shelter trust could have benefits for you and your family. You should work with your estate-planning attorney and tax advisor to determine the appropriate plan for you.
Portability (transfer to spouse) |
Credit shelter trust |
The surviving spouse has full access and control over all the assets. |
The spouse who sets up the trust designates the beneficiaries. The surviving spouse and/or other beneficiaries may receive benefits from the assets in the trust during their lifetimes. |
Growth of the assets may be subject to estate taxes when the surviving spouse dies. |
Growth of the assets in the trust generally is not taxed for estate tax purposes upon the death of the surviving spouse. |
Assets can be subject to creditor claims. |
Assets are typically protected from creditor claims. |
Assets may be subject to state estate taxes. |
Assets may not be subject to state estate taxes. |
All assets, including those from the first spouse to die, generally get a full step-up in cost basis at the surviving spouse’s death. |
Assets do not get a step-up in cost basis at the surviving spouse's death. |
Portability exclusion does not apply to federal GST taxes. |
With proper planning, assets may not be subject to GST taxes. |
If youre a parent, you want to do everything you can to help your children succeed in life. Therefore, you might think that one of the best things you can do is to save for your childrens college education. And this is certainly admirable, but could it conflict with your ability to prepare for another key goal your own retirement?Of course, this would not be a problem if you had unlimited means, but most of us dont fall into that category. So, given the financial resources and income you do have, how should you approach the college-versus-retirement issue?Fortunately, its not necessarily an either-or scenario. However, it may make sense to prioritize saving for retirement over college, for two reasons.First, your children have a lot more time to pay for college than you have to save for retirement. In addition to any grants or scholarships your children may receive, they might need to take out loans. While its a good idea to keep this debt load as manageable as possible, its also true that most student loans can be repaid over a long period of time.And heres the second point: One of the best gifts you can give your children is to be self-sufficient in your retirement. You could easily spend two, or even three, decades as a retiree, so you will need to build considerable financial resources to pay for all those years. Your adult children will have their own financial needs to address, so youll be doing them a great favor by relieving them of any financial responsibilities on your behalf. Taking these factors into account, you may want to direct most of your saving and investing efforts toward achieving a comfortable retirement. Consequently, think about putting away as much as you can afford into your IRA and 401(k) or other employer-sponsored retirement plan. Even with this focus on retirement, though, you may find opportunities to save and invest for your childrens education. For example, if you receive bonuses or income tax refunds, or your salary goes up, or youre able to free up money from your budget by reducing your debts, you could use these funds to invest in an education savings vehicle, such as a 529 plan. When you invest in a 529 plan, your earnings and withdrawals are federally tax free, provided the money is used for qualified education expenses such as tuition, room and board, books, and computers. Depending on where you live, you may also get some state tax benefits from your 529 plan. And a 529 plan isnt just for college it can be used for K-12 private school tuition costs, plus expenses from qualified apprenticeship programs, such as those found at trade schools eligible for Title IV federal student aid.It might not be easy to save and invest consistently for your retirement and your childrens education. But both goals are worthy after all, retirement can last a long time and college is expensive. So, try to develop a financial strategy that can allow you to make progress in both areas your efforts may well be rewarded. Chad Choate III, AAMS828 3rd Avenue WestBradenton, FL 34205941-462-2445chad.chaote@edwardjones.com This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
With the presidential election just a few weeks away, the public is naturally interested in not just the outcome but what the results will mean for issues of national importance. As a citizen, you likely share these concerns but how about as an investor? After the votes are counted or even before should you make some moves in anticipation of possible changes in policy? Lets look at the big picture first, through the lens of history. The financial markets have performed well and at times, not so well under Democratic and Republican presidents alike. And the same is true about which party controlled Congress.While it might be an overstatement to say that decisions made in Washington have no effect on the markets, its not always so easy to draw a direct line between what happens there and how the markets perform. For one thing, political candidates often make promises that are not fulfilled, or, if they are, have different results than intended. Also, other institutions can have a significant impact on the markets. For example, the Federal Reserve, which controls short-term interest rates, can certainly affect many market sectors. And there will always be external events, such as foreign conflicts and even natural disasters, that can make short-term impacts on the investment world.So, rather than making changes to your portfolio in anticipation of what might happen if certain candidates get elected, or even in response to actual policy changes, look to other factors to drive your investment decisions. These factors should include the following: Your goals You probably have short- and long-term goals youd like to achieve. For your short-term goals, such as a wedding, a down payment on a house or a long vacation, you may want to invest in instruments that provide stability of principal. For your long-term goals, most important of which may be a comfortable retirement, you'll need to own a reasonable number of growth-oriented investments. Your risk tolerance When you build and maintain your investment portfolio, you'll need to accommodate your individual risk tolerance. All investments carry some type of risk, but you need to be comfortable with the overall risk level of your investments. Your time horizon Where you are in life is an important consideration when investing. When you are young and just starting out in your career, you may be able to focus more on growth, as you have time to overcome the inevitable short-term market downturns. But as you near retirement, you may want to consolidate any gains you may have achieved, and lower your risk level, by moving your portfolio toward a somewhat more conservative approach. Even in retirement, though, you will need some growth potential to stay ahead of inflation. Your needs for liquidity As you invest, youll need to maintain an adequate amount of cash and cash equivalents in your holdings. Without this liquidity, you might be forced to sell long-term investments in case you have unexpected expenses. In any case, when it comes to investing, you may want to pay less attention to what names are on the ballot and instead vote for the longer-term strategies that reflect your needs and goals. Chad Choate III, AAMS828 3rd Avenue WestBradenton, FL 34205941-462-2445chad.chaote@edwardjones.com
Yes, some high cholesterol foods are worth indulging in and beneficial for your health. So, dont pass on the eggs or the full-fat yogurt if you want a nutrition boost. But there are others that should be passionately avoided, like processed meats. These high cholesterol foods can raise your risk for serious health conditions like heart disease.Some confusion abounds about the cholesterol contained in foods, often called dietary cholesterol. Not all dietary cholesterol is bad, and in fact, it is often good for you and packed with nutrition. So dont drop and run when you see a food containing cholesterol. Instead, pause and consider what type of food it is.Here are 7 high cholesterol foods to enjoy and 4 to avoid in the name of good health.Foods 1-7: Healthy High Cholesterol Foods to Enjoy1. EggsDespite all the bad publicity, eggs are a highly nutritious source of protein. But along with all the nutrients you also get about 207 mg of cholesterol per large egg. This is why the media began advising people to avoid them. But the bad press isnt deserved.According to researchers, despite the dietary cholesterol in eggs, they dont raise LDL (or bad) cholesterol and may increase HDL (or good) cholesterol which is great for heart health. While other research suggests its possible for eggs to raise LDL, its generally accepted that 1-2 eggs daily are safe and not problematic for cholesterol levels.2. CheeseWhile cheese is often promoted as a food to be avoided, its still an excellent source of calcium and other nutrients. The reluctance to consume this dairy produce lies in the 20 mg of cholesterol contained in one slice of Swiss cheese, for example.One study found that eating 3 ounces of full-fat cheese every day for 12 weeks didnt raise LDL cholesterol even though this is considered a high intake level for cheese.3. ShellfishShellfish like crab, clams, and shrimp provide large doses of protein, iron, B vitamins, and selenium. This type of seafood is also high in dietary cholesterol. A 3-ounce serving of canned shrimp packs 214 mg of cholesterol. Despite this, shellfish has a very positive impact on your cardiovascular health and may even improve your cognitive and visual health. Rather than clog your arteries with cholesterol, shellfish may actually have a positive impact on your arteries.4. Pasture-Raised SteakPasture-raised steak is an excellent source of protein, vitamins, and minerals. Why pasture-raised? Beef cows raised in pastures produce meat that contains less cholesterol and more omega-3 fatty acids, which help lower inflammation.Red meat is high in saturated fat, making it more likely to raise LDL cholesterol levels. Choosing pasture-raised over feedlot beef is better for your heart health. A 4-ounce serving of pasture-raised steak has 62 mg of cholesterol, while the same size feedlot steak has 100 mg. Most people eat steak that is two or three times this serving size.5. Organ MeatsOrgan meats, like heart, liver, and kidney, are very nutritious but high in cholesterol. Nutrients like the antioxidant CoQ10, iron, zinc, and vitamin B12 are all contained in chicken hearts. And eating just one cup provides 351 mg of cholesterol.Youre better off eating unprocessed meats, including organ meats, in moderation than consuming them sparingly. This means eating some unprocessed red meat is actually more beneficial to your health overall. Most of our modern battles with cholesterol are grounded in our overconsumption of red meat, processed meat, and other processed foods.6. Full-Fat YogurtOne cup of full-fat yogurt contains 31.8 mg of cholesterol along with several nutrients. But dont let the notable dietary cholesterol keep you from enjoying your daily portion of yogurt. According to research, eating more full-fat fermented dairy products reduces LDL cholesterol instead of raising it. It also lowers blood pressure and your risk of stroke, heart disease, and diabetes.7. SardinesNot only are sardines a convenient source of protein, but theyre also packed with nutrients. A 3.75-ounce can of sardines has 131 mg of cholesterol. But it also contains 137% of the daily value for vitamin B12, 63% of vitamin D, and 35% of calcium. Thats a lot of nutrition and a nice load of dietary cholesterol. Despite the cholesterol, sardines have only 1.5 mg of saturated fat.Foods 8-11: High Cholesterol Foods to AvoidSome high cholesterol foods are harmful to your health instead of beneficial. Here are 4 high cholesterol foods to avoid.8. Deep-Fried FoodsIts worth avoiding foods like deep-fried meats and cheese. Theyre high in cholesterol, calories, and may contain trans fats. This combination can increase your risk of heart disease and negatively affect your health in several ways. Eating too much fried food can also increase your risk of heart disease.9. Fast FoodFast food has a bad rap for a good reason. It continues to be a major risk factor for chronic conditions like obesity, diabetes, and heart disease. If you eat a lot of fast food, youre likely to have more belly fat, higher cholesterol and blood pressure, and unstable blood sugar.10. Processed MeatsHigh cholesterol, processed meats like bacon, sausage, and hot dogs should be eaten sparingly. According to one review, just eating an additional 2-ounce serving of processed meat per day produced a 42% higher risk of developing heart disease.11. DessertsThere is a reason theyre so tasty. Theyre loaded with all the bad stuff we hate to love. Desserts like cakes, cookies, ice cream, pastries, and other sweet treats are laden with calories, unhealthy fats, and added sugars. And of course, theyre high in cholesterol.These foods lack necessary nutrients like vitamins, minerals, healthy fats, and protein. They also contain high levels of added sugar that cause obesity and diabetes which can lead to increased cholesterol and heart disease.What Is Cholesterol?Its a waxy substance produced in our bodies and also found in animal products like eggs, dairy, and meat. Cholesterol serves a purpose and is necessary for healthy bodily function. It aids in hormone production, bile production (needed to digest fats), and vitamin D absorption.Your liver makes cholesterol for your bodys use, but you can also take on dietary cholesterol when you eat animal products. Dietary cholesterol is the cholesterol you eat rather than producing naturally. HDL or good cholesterol helps your body process and pass excess cholesterol. LDL or bad cholesterol is what facilitates plaque buildup in your arteries.If you eat extra cholesterol, your body will produce less. The reverse is also true. If you dont eat much cholesterol, your body will increase production to ensure it has what it needs.Is Dietary Cholesterol Bad for Your Health?According to research, dietary cholesterol isnt your enemy. It doesnt significantly raise cholesterol levels in your body. In the general population, no link between dietary cholesterol and heart disease has been found. But it can slightly elevate your cholesterol levels, which isnt an issue for most people.Even in large amounts, most of the population doesnt react to dietary cholesterol. Some people, however, are more affected by cholesterol in foods and are more susceptible to elevated levels.Surprisingly, dietary cholesterol may even improve your LDL-to-HDL ratio, which is the best indicator of your heart disease risk. But its important to remember that just because dietary cholesterol may not be as harmful as you thought, those high-cholesterol foods arent always healthy. So, enjoy your full-fat yogurt in moderation but avoid deep-fried foods. Both contain dietary cholesterol, but one is far healthier than the other.Saturated Fat Linked to High CholesterolThe real enemy seems to be too much saturated fat which triggers your body to make cholesterol even if you dont need it. Even if a food contains no dietary cholesterol, the saturated fat in that food contributes to your daily unhealthy fats intake. Too much can raise your cholesterol.So if youre concerned about high cholesterol, watch labels for the amount of saturated fat youre eating. Choose foods that are lower in saturated but also contain other nutritional benefits. For example, choose a serving of whole milk yogurt over unhealthy desserts.Tips for Lowering Your CholesterolHigh LDL cholesterol can build up in your arteries and increase your heart disease risk. But you can make lifestyle changes to lower elevated cholesterol.Eat more fiberBe more activeLose weightEat more produceStop smokingAnd remember to avoid the four big cholesterol-raising foods: deep fried food, fast food, processed meats, and most desserts. These foods arent harmful because of the dietary cholesterol they contain but because of the high amounts of saturated fats with little other nutritional benefit. Its okay to eat something saturated. So you dont have to avoid dessert every evening. Just be mindful of your daily choices. The average man should consume no more than 30 grams of saturated fat daily to maintain health, and the average woman should have no more than 20 grams.
Hello, I'm Chad Choate a dedicated financial advisor in Bradenton, FL, I began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.
Hello, I'm Chad Choate a dedicated financial advisor in Bradenton, FL, I began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals. As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that. Whether you're planning for retirement, saving for college for children or grandchildren or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service. But we're not alone. Thousands of people and advanced technology support from our office can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals. I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program. I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.
Experience and BackgroundI am a financial advisor in Bradenton, FL, and began my career with Edward Jones in 2017. As a financial advisor, I want to find out what's important to you and help you build personalized strategies to achieve your goals.As a lifelong Manatee County resident, I graduated from the University of South Florida and was a teacher in Manatee County before joining Edward Jones. My driving force is to change people's lives in a positive way, and what better place than my home to do that.Whether you're planning for retirement, saving for college for children or grandchildren, or just trying to protect the financial future of the ones you care for the most, we can work together to develop specific strategies to help you achieve your goals. We will also monitor your progress to help make sure you stay on track or determine if any adjustments need to be made. Throughout it all, we're dedicated to providing you with top-notch client service.But we're not alone. Thousands of people and advanced technology support our office so that we can help ensure you receive the most current and comprehensive guidance. In addition, we welcome the opportunity to work with your attorney, accountant and other trusted professionals to deliver a comprehensive strategy that leverages everyone's expertise. Working together, we can help you develop a complete, tailored strategy to help you achieve your financial goals.I currently volunteer with the Manatee Hurricane football Broadcast and Booster Club, serve on my church's trustees council and have previously served as a leader in Young Life. I am a member of the Manatee Chamber of Commerce and an alumnus of their Leadership Manatee program.I have been married to my childhood sweetheart, Ashley, for 15 years and we have a son, Wesley, and daughter, Camryn. We enjoy watching our children play their sports and traveling as a family.