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ESTATE AND GIFT TAX CONSIDERATIONSToday, that device is limited to a degree by the generation-skipping transfertax. By utilizing the GST tax exclusion, however, opportunities to skip generationstax free still exist.(e) Credit-Maximizing Trusts and TransactionsAnother technique is use of available credits to shield assets from tax, and thusmaximize tax savings. Spouses can, by reason of the marital deduction, 181 transferassets to the other free of tax. However, if a spouse transferred assets out ofhis or her estate to a person other than his or her spouse, when the amounttransferred is shielded by the unified credit, the transfer would also be tax free.That “person” can be a trust. Thus, an individual can transfer assets to a trust,shielded by the credit, and assets to a spouse, shielded by the marital deduction,in such a way as to reduce or perhaps eliminate estate taxation. 182(f) Estate EqualizationBecause of the progressive nature of the estate tax, larger estates may be taxed toa greater extent than smaller ones. If one or the other spouse ends up with a proportionatelylarger estate than the other, higher estate taxes may be the result. Totake advantage of the tax savings of lower rates, the estate planner will seek tobalance the estates of spouses so that they are approximately equal. Reliance onthe marital deduction alone may mean that the value and benefit of one spouse’sunified credit is lost. Estate equalization is accomplished by means of a blend ofuse of the marital deduction and the unified credit.(g) Revocable Living TrustsEstate planning can entail use of one or more revocable living trusts. This trust isin the nature of a contract that determines how an individual’s property is to bemanaged and distributed during his or her lifetime, and also at death. A trust isa living trust when it is established during the lifetime of the individual creatingthe trust (the grantor of the trust 183 ) and it is revocable when the grantor hasreserved the right to amend or revoke the trust during his or her lifetime. Often,the grantor of a revocable living trust is the trustee of the trust. 184Once the trust is established, the grantor transfers property to the trust duringhis or her lifetime. Thus, instead of owning certain assets in the individual’sname, or owning assets jointly with another (such as the individual’s spouse),the assets are “owned” by the individual in the capacity of trustee of the trust.Because the trust is revocable and because the grantor is the trustee, the individualhas complete control over and access to the assets that are owned by thetrust while he or she is living. Should the individual become incapacitated, theperson named as the successor trustee (such as the spouse) would begin to181 See § 8.3(b)(ii).182 See, e.g., § 8.6(g).183 See § 3.7.184 It is because of these incidents of ownership that the grantor is personally taxable on income generated by thetrust assets. 252