From pbl.legal: (US context?) Credit Shelter Trusts (CSTs) are irrevocable trusts utilized by high-net-worth families to reduce or avoid federal estate taxes while ensuring assets are distributed according to the deceased spouse’s wishes.

CSTs function by setting aside a portion of the deceased spouse’s estate tax exemption amount upon death, with the surviving spouse typically receiving income from the trust while the principal is protected for future beneficiaries.

Recent increases in estate tax exemption amounts and the introduction of portability have diminished the necessity for CSTs for many families, but they remain beneficial for asset protection, ensuring testamentary intent, and maximizing generation-skipping transfer tax exemptions.