What is an Exemption Trust?  

An exemption trust reduces the estate taxes of a married couple when one of them passes away. When the first member of the couple dies, the assets are placed in a trust. When the surviving spouse dies, the assets are distributed to the trust’s beneficiaries, typically the children, who don’t pay estate taxes.   

Imagine The Incredibles. When Mr. Incredible dies, part of his estate goes into the trust. When Elastigirl passes away, those assets are transferred to their children without estate taxes.