If your trust was drafted before about 2012 and it splits into two trusts automatically at the first death, that structure was solving a tax problem that no longer exists for you. Portability of the federal estate tax exemption made the mandatory split unnecessary for the overwhelming majority of couples.
Worse, keeping it can cost the surviving spouse money and years of administrative hassle for nothing.
What an A/B trust was for
Before portability, each spouse's estate tax exemption was use-it-or-lose-it. If everything passed to the survivor outright, the first spouse's exemption evaporated. So trusts were written to divert the first spouse's share into an irrevocable bypass trust, the B trust, preserving that exemption while still supporting the survivor.
It was elegant planning for a real problem, back when the exemption was $600,000 and a decent house in Santa Monica could blow through it.
What changed
Portability. A surviving spouse can now claim the deceased spouse's unused federal exemption, provided a timely estate tax return is filed to elect it. Combined with an exemption of $15 million per person in 2026, made permanent by the 2025 tax act, a married couple is looking at roughly $30 million of shelter without any trust splitting at all.
California has no estate tax to plan around either. So for a couple whose estate is a house and some retirement accounts, the A/B structure has nothing left to do.
The cost of leaving it in
A funded bypass trust is irrevocable. It needs its own tax ID and annual return, its assets are locked into the terms your spouse wrote decades ago, and those assets get no second step-up in basis at the survivor's death. On an appreciated Los Angeles house, that lost step-up can be the most expensive line item in the whole plan.
Where the split still makes sense
- Second marriages where each spouse wants to guarantee their own children inherit their share.
- Estates genuinely approaching the federal exemption, which is a small population.
- Situations where a spouse wants the survivor supported but not able to redirect the remainder.
- Couples with significant creditor exposure on one side.
Notice that most of those are control reasons, not tax reasons. That is the honest state of A/B planning in 2026.
“I've had surviving spouses come in three years after a death, having never funded the B trust their document required, technically out of compliance and terrified. Usually there is a fix. Usually the trust should never have required the split in the first place.”
Delia Vasquez-HartThe modern alternative
A disclaimer trust. Everything passes to the survivor, and if a split ever turns out to be useful, the survivor has nine months to disclaim into a bypass trust. Flexibility without commitment. For couples who want a lever available but do not want it pulled automatically, it is usually the better design.
Questions we get asked
How do I know if my trust has a mandatory A/B split?
Look for language about a Survivor's Trust and a Bypass, Credit Shelter, Decedent's, or Exemption Trust. If it says the trustee shall divide the estate at the first death, it is mandatory.
My spouse died and we never split the trust. What now?
Bring everything in. Depending on how long it has been and what the document requires, there may be a cleanup path. Do not just keep going as if the provision is not there.
Can we amend it out?
While both spouses are living and have capacity, usually yes, and we typically restate the trust rather than patch it. After the first death, the answer depends on what the document allows.
Does portability happen automatically?
No. It requires filing a federal estate tax return within the deadline to make the election, even when no tax is owed. Missing that filing is how the benefit gets lost.
Pull your trust out and search the table of contents for the word Bypass. If it is in there and your combined estate is under a few million dollars, book the free consultation and we will look at whether restating it makes sense.