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The concepts contained herein are not intended to serve as advice and may have legal, tax and accounting implications. Consult your Attorney and CPA for advice.

B-Trusts - This type of trust can be established to ensure that the Estate Tax Exemption Amount1 of both spouses are used most efficiently regardless of when either spouse dies. For example, the unused Estate Tax Exemption Amount is applied to the estate of the first spouse upon his/her creation of a B-Trust. The amount placed in the B-Trust is exempt from estate taxes. At the second spouse's death, the assets in the B-Trust pass to the heirs free from estate tax. Then, upon the surviving spouse's death, his/her Estate Tax Exemption Amount is applied to his/her estate.

Marital Trusts - A trust which pays all of its assets to the surviving spouse. A marital trust may postpone the assessment of estate taxes until the death of the surviving spouse but may not completely shelter your estate from taxes. When the surviving spouse dies, the assets inside the marital trust are included in the surviving spouse's gross estate. If the gross estate is large enough, estate taxes may be assessed.

Qualified Terminable Interest Property (QTIP) Trusts - This type of trust is similar to other marital trusts in that it allows the deceased spouse to provide ongoing income for the surviving spouse. It is, however, different from other marital trusts because the deceased spouse still designates beneficiaries for the remaining trust assets at the surviving spouse's death (versus the surviving spouse designating the beneficiaries). At the death of the surviving spouse, the remaining estate will be included in the surviving spouse's gross estate and may be subject to estate taxes.

Unlimited Marital Deduction - Federal estate tax law allows you to distribute your entire estate to your surviving spouse, estate and gift tax free, provided the surviving spouse is a U.S. citizen.

Charitable Remainder Trusts (CRT) - A CRT can convert your highly appreciated assets into a lifetime income source without incurring capital gains or estate taxes. Additionally, one or more charities you select may benefit from your gift. By establishing a CRT, you can create a source of lifetime income to supplement your retirement, defer capital gains, estate taxation and current income taxes by a charitable deduction. You also make a significant future charitable gift, and potentially increase inheritance to your family and heirs.

Annual Gift Tax Exclusion - In 2016, an individual is allowed to gift as much as $14,000 per donee (married couples can gift up to $28,000) free of gift taxation. This enables you to reduce the value of your estate and transfer it in a controlled manner over time.




1As of January 1, 2016, the annual gift tax exclusion is $14,000 per donee (indexed for inflation). For more information on this subject, and professional guidance in selecting the right kind and amount of insurance coverage, contact your life insurance producer.

This material is not intended to be used, nor can it be used by any taxpayer, for the purpose of avoiding U.S. federal, state or local tax penalties. This material is written to support the promotion or marketing of the transaction(s) or matter(s) addressed by this material. Pacific Life, its distributors and their respective representatives do not provide tax, accounting or legal advice. Any taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

Pacific Life refers to Pacific Life Insurance Company and its affiliates, including Pacific Life & Annuity Company. Insurance products are issued by Pacific Life Insurance Company in all states except New York and in New York by Pacific Life & Annuity Company. Product availability and features may vary by state. Each insurance company is solely responsible for the financial obligations accruing under the products it issues. Insurance products and their guarantees, including optional benefits and any crediting rates, are backed by the financial strength and claims-paying ability of the issuing insurance company, but they do not protect the value of the variable investment options. Look to the strength of the life insurance company with regard to such guarantees as these guarantees are not backed by the broker-dealer, insurance agency or their affiliates from which products are purchased. Neither these entities nor their representatives make any representation or assurance regarding the claims-paying ability of the life insurance company. Variable insurance products are distributed by Pacific Select Distributors, LLC (member FINRA & SIPC), a subsidiary of Pacific Life Insurance Company, and an affiliate of Pacific Life & Annuity Company, and are available through licensed third-party broker-dealers.

Pacific Life's Home Office is located in Newport Beach, CA.