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Trust Glossary
Glossary of Common Trust Terms
At MidWestOne Bank, we offer a full menu of common trust options.
A-B Trusts
An estate plan for a married couple where the estate is divided into two trusts, with the “A” Trust qualifying for the marital deduction and the “B” Trust that uses up the decedent’s estate tax unified credit.
Charitable Lead Trust
A trust (for a fixed term) in which a charity is the income beneficiary and the remainder or principal (at the end of the term) is given to a non-charitable beneficiary.
Charitable Remainder Trust
A trust (for a fixed term) for the life of an individual where the income is paid to a non-charitable beneficiary (during the term) and the remainder or principal is paid to a charity upon termination.
Credit Shelter Trust (Bypass Trust)
A taxable trust funded with the credit shelter amount. Frequently, this type of trust is used to provide benefits to a decedent’s surviving spouse, while avoiding inclusion in that spouse’s gross estate. Assets in this type of trust pass to descendants with no further estate taxes.
Crummey Trust
The beneficiaries have a limited power of withdrawal from this kind of trust. The withdrawal is usually limited to the amount excludable from gift tax under the annual exclusion.
Life Insurance Trust
A trust established to own, or be the beneficiary of, life insurance policies.
Living Trust
A trust designed to be in effect during the lifetime of the grantor. Also known as an “inter vivos” trust.
Marital Trust
A trust consisting of property that qualifies for the marital deduction.
Special Needs Trust
A trust designed to help those with special needs (beneficiary) without impacting eligibility for federal benefits.
Spendthrift Trust
A trust established so that the interest of a beneficiary cannot be assigned or taken away by creditors.
Testamentary Trust
A trust established by the terms of a will.
* Securities offered through Linsco/Private Ledger (Member FINRA/SIPC) a registered broker dealer, securities and or insurance products are not insured by the FDIC; are not a deposit or any other obligation of, or guaranteed by, the depository institution, are subject to risks, including the loss of principal amount invested. MidWestOne Bank is not affiliated with Linsco/Private Ledger.
