My father recently died, and during the last 13 years he went from low/middle class to having a lot of money. We haven't had an official reading of the will yet, but I got the basic details which is this;

My stepmother and him set up an AB trust.

I guess he left 1.5 million (his half of the estate) to hes kids of which there are 5 adult kids and some grandchildren. The adult kids each get 265k and the rest being dispersed to the grandkids for college funds. He also has left one of his houses to my brother and I (we are confirmed bachelors at this point and live together anyway) because the other 3 siblings are already living in houses that he helped finance.

So here's where I get confused. This is all as I said in an AB trust. My reading about this as left me with the impression that while he left us this money and property, it is still under my stepmothers control to do with as she wants until she dies. She gets any interest generated, and can spend the money for her expenses. and then when she dies the money get's dispersed to those my father specified.

Is this how it works?

I'm not on some kind of freak out about getting money, I just don't understand what an AB trust is or how it works.

 
This is straight from "Make your own living trust" 7th edition by Dennis Clifford,

" An AB trust is designed for couples with a combined estate over the estate tax threshold (I think it is 1.5 million) who want to leave most or all of their property to each other.  Couples in this situation often have a clear goal:  to keep the estate of the deceased spouse legally seperate from the estate of the surviving spouse, while allowing the surviving spouse to benefit from the deceased spouse's property......The surviving spouse can receive all income from the deceased spouse's trust property, and can even use that trust's principal for basic needs.  But the deceased spouse's trust property is never leagally owned by the surviving spouse."

Hope this helps some

Sounds alot like what my Parents set up for my Grandparents before my Grandpa died, and that's usually to avoid taxes & the like on the estate.  

The other big reason is to transfer the funds so that both partners can't get cleaned out if one of them get's ill in a very expensive way.  The Government will take over, but only after all assets available are pretty much gone - what that means is that if you don't seperate the assets in some legal way, all of a sudden the surviving spouse (illnesses that expensive are almost always fatal) is completely and totally broke by the end of it.

You probably need a Lawyer to figure out exactly what it means.  We needed one (my Uncle on the other side of the family, actually) to set up my Grandparents.  I only know anything about it because the trusteeship devolves to me in the event something ever happens to my Mother.  Actually, it's joint with me and my Uncle then.  My Grandparents didn't trust him to have Trusteeship by himself, so they threw me in there if something happens to my Mom.

Quoted:   This is straight from "Make your own living trust" 7th edition by Dennis Clifford, " An AB trust is designed for couples with a combined estate over the estate tax threshold (I think it is 1.5 million) who want to leave most or all of their property to each other.  Couples in this situation often have a clear goal:  to keep the estate of the deceased spouse legally seperate from the estate of the surviving spouse, while allowing the surviving spouse to benefit from the deceased spouse's property......The surviving spouse can receive all income from the deceased spouse's trust property, and can even use that trust's principal for basic needs.  But the deceased spouse's trust property is never leagally owned by the surviving spouse." Hope this helps some

Thanks.

I've read everything I can on the net, but what still isn't clear to me is the status of what was left to me and my bothers and sisters. It looks like my stepmother retains control and recieves any interest that the money and property brings until she dies. I know my father was just trying to do this in a way that saved on taxes, but that seems a little weird to me. We all inherit money and property, but can't use it, and it may be gone by the time we do get access to it.

Like ASUsax said, A lawyer will be able to fill in the details.

I don't think your step mother can sell the property because she technically doesn't own it.  You will receive full control/title when she passes.  That's just my non-educated guess.

Good luck and keep us posted.

Quoted: Like ASUsax said, A lawyer will be able to fill in the details. I don't think your step mother can sell the property because she technically doesn't own it.  You will receive full control/title when she passes.  That's just my non-educated guess. Good luck and keep us posted.

I'm sure that soon we will be having a family meeting about this, and all will be explained. I was just curious about this AB trust thing since I had never heard of it.