An A-B trust is an estate-planning structure that, at the first spouse's death, divides assets into a marital (A) trust and a bypass/credit-shelter (B) trust. The B trust uses the deceased spouse's estate-tax exemption and remains outside the survivor's taxable estate, while the A trust benefits the survivor. This design preserves exemptions, controls ultimate disposition to heirs, and can offer creditor and remarriage protections. Although federal portability reduces the need in some cases, A-B trusts remain valuable for state-level taxes, blended families, and governance objectives that require control over the survivor's access and distributions.

Finance leaders obtain an independent 409A valuation to set option strike prices and defend deferred-comp arrangements. Advisors coordinate with valuation firms, provide cap tables and projections, and brief the board on methodology. A current valuation creates a safe-harbor FMV,protecting employees from discounted option grants that could trigger 409A penalties. Startups Refresh appraisals at least annually or after financings. In planning, advisors align option grants,RSUs, and bonus plans with the valuation date, and ensure employment agreements and severance provisions reference compliant definitions of fair market value and separation events.