AB Trust: when the first spouse dies, the trust splits into Trust A (for the survivor) and Trust B (a bypass trust that uses the deceased spouse's estate tax exemption). Trust B's remainder goes to the deceased spouse's chosen beneficiaries — valuable in blended families. It guarantees the bypass trust gets funded, but adds administration, separate tax filings, and less control for the survivor, and Trust B becomes irrevocable.
Disclaimer Trust: the surviving spouse decides after the first death whether to "disclaim" assets into a bypass trust. It's more flexible and simpler to draft, but depends on the survivor choosing to disclaim — in writing, irrevocably, within 9 months, and before accepting any benefit from those assets (California Probate Code §§275–288 and IRC §2518).
An AB trust offers certainty — especially with children from a prior relationship or larger estates. A disclaimer trust offers flexibility. With no California estate tax and portability of the federal exemption, simpler options may fit smaller estates. Always review your situation with a California estate planning attorney.
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