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Jan 24, 2023 · A Trust is a financial agreement between someone who owns an asset and a trusted person to hold and manage that asset for them. In estate planning, a Revocable Trust is often used as a substitute for a Will, but there are many other descriptions for any single Trust such as Irrevocable, Living, Joint, Testamentary, and Grantor.
- Revocable Trust
- Irrevocable Trust
- Joint Trust
- Bypass Trust
- Qualified Terminable Interest Property Trust
- Special Needs Trust
- Asset Protection Trust
- Spendthrift Trust
- Generation-Skipping Trust
- Life Insurance Trust
Good for: People looking for flexibility in managing their assets during their lifetime A revocable trust can be changed or canceled by the grantor at any time as long as the grantor is mentally competent at the time of the decision. If you expect certain life changes (e.g., birth of a child) that can prompt the need to amend a trust, consider maki...
Good for: High-net-worth individuals looking for estate tax benefits and greater protection An irrevocable trust cannot be modified or revoked without its beneficiaries’ permission or the court’s interference. Once it is established, the grantor relinquishes ownership and control of the assets listed in the trust, which are transferred out of their...
Good for: Married couples who want to manage and distribute assets together A joint trust combines the assets of both spouses or committed partners for easier management and distribution. This type of trust is revocable before the second spouse passes away; both parties have the ability to manage and control the assets, often with the aim of passin...
Good for: Blended families for control over the disposition of assets after both spouses’ death A bypass trust, also known as an AB trust or credit shelter trust, is designed for married couples. It aims to protect and shield assets for beneficiaries while offering flexibility to a surviving spouse. In the context of blended families, a bypass trus...
Good for: Married individuals with significant estates seeking to minimize estate taxes A QTIP trust allows couples to optimize tax benefits while ensuring that assets are distributed according to their wishes. This type of trust is designed to qualify for the unlimited marital deduction, thereby sidestepping gift and estate taxes, while providing ...
Good for: Families with disabled dependents A special needs trust is established to meet the financial needs of a dependent with special needs and appoints them as the beneficiary. It funds the beneficiary’s medical care or day-to-day needs while retaining the dependent’s qualification to receive government benefits such as Supplemental Security In...
Good for: High-net-worth individuals looking to protect assets from creditors or litigation As the name would suggest, asset protection trusts (APTs) are the best type of trust to protect your assets against creditors, legal disputes, or judgments against your estate. This trust is irrevocable and allows the trustee to hold your assets to protect t...
Good for: Those wishing to shield assets from a financially irresponsible beneficiary A spendthrift trust is helpful if you believe your heirs will squander their inheritance. It allows you to specify when and how your beneficiaries may access assets designated to them. For example, you could state that beneficiaries may only receive income from th...
Good for: High-net-worth individuals who want to leave assets to later generations while avoiding estate taxes You can set up a generation-skipping trust if you prefer your estate to go to your grandchildren (or later generations) rather than your children. By transferring the assets to your grandchildren instead of your children, the assets enjoy ...
Good for: Individuals looking to exclude life insurance proceeds from their taxable estate A life insurance trust, often called an irrevocable life insurance trust (ILIT), is designed to hold the proceeds of your life insurance policy. It is irrevocable and allows your life insurance payouts to be invested and distributed by the trustee without inc...
Jan 11, 2024 · Estate planning. Trusts can be used as part of an estate plan to pass wealth to other family members. They let you specify who should receive assets and/or income from the trust, and what it should be used for during the settlor’s lifetime or after their death. A trust can prevent children or other beneficiaries from frittering away an ...
Oct 30, 2024 · 4 reasons to consider getting estate planning advice. Protecting your legacy with a testamentary trust or living trust is an important part of the estate planning process. Getting expert advice from an experienced attorney is just as important. They can help you choose the best types of trusts based on your individual circumstances.
Sep 18, 2023 · Trusts are sophisticated arrangements that can involve a number of tax and estate planning issues. A trust must be properly structured to achieve your estate planning goals. Get professional advice before taking action. Key point. There are 2 main types of trust: Living trust: created during your lifetime; Testamentary trust: created upon your ...
Oct 12, 2022 · For example, the distribution of trust income could be left to the trustees’ discretion, while capital distributions to beneficiaries are fixed by the trust agreement. By using a discretionary family trust, children or other family members can benefit from family wealth without having direct control or ownership of property.
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Apr 8, 2024 · A trust is a legal arrangement that allows you to separate who owns a given asset from who controls it and who uses it. You can create a trust and transfer assets into it so the trust becomes the ...
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