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Can the trustee of a bypass trust also be a beneficiary?

This is a common question in estate planning, and the answer is generally yes, but with important considerations and potential drawbacks. A bypass trust, also known as a credit shelter trust or an A-B trust, is designed to take advantage of the estate tax exemption, shielding assets from estate taxes upon the death of the first spouse. Allowing the trustee to also be a beneficiary can seem convenient, but it introduces complexities that must be carefully considered with legal counsel, like Steve Bliss, an experienced estate planning attorney in Escondido. It’s a delicate balance between control, potential conflicts of interest, and the long-term goals of the trust.

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What are the potential drawbacks of a dual role? While not strictly prohibited, a trustee who is also a beneficiary …

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