An A-B trust is a joint trust established by a married couple to reduce estate taxes. It is established by each spouse putting assets into the trust and naming any suitable person other than the other spouse as the final beneficiary. The trust gets its name from the fact that when one spouse dies, it splits into two separate entities. Trust A represents the survivor's trust, while Trust B represents the decedent's trust.

An A-B trust is a joint trust established by a married couple that divides into a survivor portion (the A trust) and a bypass portion (the decedent's trust, or B trust) upon the death of one spouse.

The A-B trust effectively minimizes estate taxes by deferring them until the death of the surviving spouse.

The surviving spouse has limited control over the decedent's trust, but the terms of the decedent's trust can be set up to allow the surviving spouse to access and even draw income from the assets.

A-B trusts are no longer commonly used because the estate tax exemption, which is now inflation-indexed, is sufficient for the majority of estates.

The surviving spouse's property interests are held in the A trust, but they have limited control over the assets in the deceased spouse's trust; however, this limited control over the B trust allows the surviving spouse to live in the couple's home and draw income from the trust, provided these terms are specified in the trust.

The advantages of an A-B trust include death tax exemptions, built-in trust protection, and exemption portability. Maintenance costs, a complex structure, and the possibility of large capital gains taxes after both parties die are all disadvantages.