The credit shelter strategy is one the two ways available for married clients to obtain the benefits of two estate tax credit shelter exempt amounts. The IRS allows each person $15 million (2026) in assets, before starting to levy any estate taxes. By using credit shelter trusts, married clients can potentially get the benefits of two estate tax credits, doubling the amount of assets exempt from tax to $30 million (2026).

Unlike portability, credit shelter trusts have to be set up in advance. That is, before even one of the two spouses pass away. Before portability the exempt amount of the first spouse to die often ended up dying with the first spouse to die. The credit shelter strategy is designed to prevent that result.

The estate tax exemption can be preserved by having a credit shelter trust that contains assets to qualify for the exemption for the first spouse to die. The second spouse to pass away will also get their own estate tax exemption for any remaining assets.

In this way, the married couple can potentially “shelter” assets totally up to $30 million (2026). The increased amount from the surviving spouse only having a $15 million exemption arises from assets preserved in the credit shelter trust.

The key factor is for the credit shelter trust to be drafted so that the IRS “counts” the credit shelter trust as assets “belonging” to the deceased spouse. However, good drafting can ensure that the surviving spouse retains the income and management of the credit shelter trust during his or her lifetime, even though the IRS is forced to “count” the assets as belonging to the spouse that passed away.