spousal remainder trust

Spousal remainder trust

A fixed-term trust from which income is distributed to the beneficiary (such as a child of the grantor) to take advantage of a lower tax bracket, and that at the end of the term passes to the grantor's spouse.

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spousal remainder trust

An irrevocable trust that may be set up for any length of time in order to pass assets to a spouse. Between the time that the trust becomes effective and the time that the assets are passed, income earned by the trust is taxable to a named beneficiary at the beneficiary's tax rate.