While you do not need to have a trust in order to work with our Trust Service team, many of our clients have explored whether utilizing a trust is right for them. The following list is meant to serve as a high-level guide for the most common types of trusts.
A Revocable Trust (also known as a Living or Inter Vivos Trust) allows you to transfer assets outside of probate while still maintaining control of those assets during your lifetime. This type of trust can be amended, changed, or revoked at any time during the lifetime and competency of the person establishing the trust (the “grantor”). A Revocable Trust typically becomes irrevocable upon the incapacity or death of the grantor. The grantor specifies what is to occur under those circumstances.
An Irrevocable Trust can be used to transfer assets outside of your estate but cannot be revoked or amended once established. The trust assets are effectively removed from your estate and will not be subject to estate taxes, but you will no longer have control over the assets.
A Testamentary Trust is a trust established under your Last Will and Testament. It allows you to name a trustee and designate to whom and how funds are to be distributed following your death.
A Marital Trust is established under specific federal tax rules to qualify as a bequest to a surviving spouse that will not be subject to federal estate tax. The marital trust assets are generally included in the estate of the second to die.
A Family Trust is established to capture assets not going to the surviving spouse or to the marital trust while still allowing the potential use by the surviving spouse. The assets will not be included in the estate of the surviving spouse but will go directly to named beneficiaries when the surviving spouse dies. This type of trust is designed to make full use of the federal estate tax exemption for each spouse.
A QTIP Trust is used to provide income to a surviving spouse while preserving assets to go to additional beneficiaries upon the surviving spouse’s death. This type of trust is often used as a tool for blended families.
A Charitable Remainder Trust is an irrevocable trust that allows you to receive a stream of income for life or a terms of years after which the amount that is left in the trust (the remainder) goes to a designated charity or charities.
A Generation-Skipping Trust (GST) is designed to take advantage of the GST tax exemption that allows you to have a portion of your estate “skip” your children and go instead directly to your grandchildren without being taxed in the middle (your children’s) generation.
Special Needs Trusts are designed to provide benefits to disabled persons without impacting eligibility for government benefits.
An Irrevocable Life Insurance Trust (ILIT) is designed to keep life insurance proceeds from being included in your estate. Funds contributed for payment of the policy premiums are considered cash gifts, and the trustee must notify the beneficiaries whenever those contributions are made.
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