Re: Is the Credit Shelter Trust a Grantor Trust?

Only a grantor could be treated as a grantor under §674. A beneficiary, or other person, might be treated as a grantor under § 678, if the statute provides that the person is treated that way. Under that section a beneficiary can be taxed on trust income to the extent he (briefly) has or had the power, exercisable only by himself, to distribute principal to himself.

You still haven't given all the information requested, and if it's a trust qualifying under §2056 that could add a level of complication. But normally those rules apply only to grantors, not to anyone else, except as noted above.

That's done frequently in §2056 trusts. The trustee has the ability to allocate property to either the A trust or the B trust, as long as each trust is funded with assets with the proper values.

It depends on what purposes you mean. There are two basic purposes of these trusts. One is to avoid probate. The other is to avoid unnecessary estate taxes. By definition it's not a "bypass" trust if it's included in the surviving spouse's estate, becase in that case it would not bypass that estate. Just tell us exactly what you are trying to accomplish, and you might get a useful answer. But so far vague questions really don't have any practical meaning. Stu