Trust Glossary

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 the decedent’s estate tax unified credit.

Charitable Lead 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.

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