Trusts

Family

Trusts are one of the most powerful and flexible estate planning techniques you can use to protect your family from the unpredictable changes of life. More than any other financial arrangement, trusts increase the likelihood that your personal and financial goals are reached. For example, trusts can preserve control over disposition of assets, maximize effective tax planning, protect you and your family from lawsuits, and give you flexibility to adapt to the changing family needs.

There are many different types of trusts that may fit your needs. Depending on your family’s circumstances, your estate plan may require one or more of the following trusts:

  • Perpetual (Dynasty) Trusts. This type of trust can last for as long as the family desires, and theoretically could last forever. Thus, Perpetual Dynasty trusts are one of the most powerful tools in preserving family wealth. A properly drafted and structured Perpetual Dynasty Trust will be exempt from estate and generation-skipping transfer taxes for as long as the trust lasts. Thus, the trust will accomplish significant wealth accumulation because of the transfer tax-free compounding.

  • Life Insurance Trusts: A life Insurance Trust provides one of the most effective methods to leave life insurance proceeds to beneficiaries of your estate without having estate and gift tax.

  • Charitable Trusts. This type of trust can be established to transfer assets to children or grandchildren at a greatly reduced gift and estate tax cost. Can also be used to gift assets to charity to receive a current income tax charitable deduction.

  • Grantor-Retained Annuity Trust. This type of trusts allows for large financial gifts to family members at a reduced gift tax level or without having to pay gift taxes altogether.

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  • Revocable Living Trust. A revocable living trust may be amended, altered or revoked by the person who settles the property (settlor) during the settlor’s lifetime. A revocable living trust is a common substitute for a Will because it avoids Probate, allows you to retain control of the assets during your life, and protects yourself and your assets if you become disabled.

  • Irrevocable Living Trust . In contrast to a revocable living trust, an irrevocable living trust is most often unable to be amended, altered or revoked. However, this type of trust provides favorable tax consequence, avoids Probate, and can provide creditor protection.

  • Qualified Personal Residence Trust (QPRT Trust). A QPRT Trust can be used to transfer a residence (or values of residence) at reduced estate and gift tax cost

  • Bypass Trust. A Bypass Trust is used to provide for maximum use of the unified credit in the estates of both spouses.

  • Qualified Terminable Interest Trust (QTIP Trust). A QTIP Trust provides income from trust assets to your spouse for life and qualifies for the marital deduction. However, once your surviving spouse dies, retain control over who will receive assets.

  • Spendthrift Trust. A spendthrift trust is used when the person you want to receive the assets (beneficiary) of the trust is unable to control their spending and you want to reduce creditor’s ability to attach to the assets of the trusts. Thus, a trustee has the power of how to distribute the funds to the beneficiary of the trust.

  • Special Needs Trust. This type of trust is a form of Spendthrift Trust but is used for a disabled or elderly beneficiary. Distributions from the trust are intended to supplement public benefits, not displace them.
  • Charitable Remainder Trust. This type of trust allows you to maximize the use of appreciated assets, provide income to you or other family members, and then gift assets to charity to receive a current income tax charitable deduction.

  • Charitable Lead Trust. A Charitable Lead Trust provides income to charity and ultimately can be used to transfer trust assets to children or grandchildren at a greatly reduced gift and estate tax cost.

  • Generation Skipping Trust. Leave assets for your grandchildren (and more remote descendants) while taking advantage of the $5 million exemption ($10 million for married couples) from the generation skipping tax.

  • Defective Grantor Trust. The purpose of this type of trust is to gift assets to a younger generation without additional gift taxes.

  • Minor Trust / 2503c Trust / Extra Crummey Trust. The benefit of these trusts allows for gifts to qualify for the annual gift tax exclusion.

As you can see, there are many different types of trust and different options to suit your needs and circumstances. Contact us and we will assist you in achieving your estate planning goals.