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exemption trust

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Financial Dictionary

Exemption Trust

A trust whose purpose is to drastically reduce or eliminate federal estate taxes for a married couple's estate. This type of estate plan sets up an irrevocable trust that will hold the assets of the first spouse to die.

Investopedia Commentary

The amount will not be taxed for federal estate tax purposes when the second spouse dies.

See also: Estate Tax, Irrevocable Trust, Trust, Unit Trust

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