Should You Get Rid of Your AB Trust? Not So Fast.

Should You Get Rid of Your AB Trust? Not So Fast.

Salt Lake City, Utah - If you’ve met with an estate planning attorney recently, there’s a good chance you’ve heard this advice: “You don’t need an AB Trust anymore.”

And on the surface, it sounds convincing. After all, many attorneys believe AB Trusts are outdated because of recent tax law changes. They’ll tell you the structure can create unnecessary capital gains tax problems — and that may be true if the trust isn’t designed properly.

But here’s the thing most attorneys don’t explain: for many families — especially blended families — an AB Trust can still be the smartest way to protect your assets and your children.

Why AB Trusts Still Matter

Think of a blended family like the Brady Bunch — two families, two sets of children, one combined household.

Without the right trust structure in place, here’s what can happen: the surviving spouse becomes the sole trustee after the first spouse passes away. That spouse now has control over the entire trust. If the trust isn’t carefully drafted, they could change the terms — and sometimes, they disinherit the deceased spouse’s children entirely.

I see this scenario far too often, and almost every time, it’s not what the original couple intended.

The Awkward Question No One Asks

During consultations, I always ask couples:

"Do you want your surviving spouse to have the power to change the trust and potentially disinherit your children?"

Almost every time, both spouses suddenly stop looking at each other and start looking at me. It’s an awkward moment, but an important one.

The reality is, in nearly every blended family, there are unspoken tensions between a surviving spouse and stepchildren. If your trust doesn’t account for this dynamic, your children could lose their inheritance.

Solving the Tax Dilemma

So, do you get rid of your AB Trust? Not necessarily. Instead, you fix it.

A strategy called a Capital Gains Election can solve the tax issues while keeping the protections an AB Trust provides. It allows you to protect your children and avoid saddling them with unnecessary taxes.

What You Should Do Next

If you have an AB Trust — or if you’ve been told to get rid of one — let’s talk. I’ll review your trust, explain your options, and help you avoid some of the most common (and costly) mistakes families make.  Your estate plan should protect your loved ones, not accidentally disinherit them.