A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of one or more beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.

The primary purposes for having a trust:

  • Protect Property
  • Greater Control of Assets
  • Avoid Probate
  • Mitigate Taxes
  • Privacy Protection
  • Incapacitation
  • Flexibility
  • Assure proper usage of Assets passed to Beneficiaries

A-B Trust

  • Joint Trust created by Married couple
  • Each Spouse places assets in the trust and names a final Beneficiary other than the Spouse
  • The purpose is minimizing Estate taxes

Charitable Lead Trust

  • Provide income to Charitable organization for specific time period
  • At conclusion donated assets returned or redistributed to another

Charitable Remainder Trust

  • Strategy to avoid Capital gains on sale of appreciated property
  • Secures income tax credits for donation of property into trust
  • Generates an income stream based on the fair market value of asset
  • Ultimately benefits the Philanthropy of Donor’s choice

Credit Shelter Trust / Bypass Trust

  • Pass assets into trust for benefit of surviving spouse
  • Since assets do not pass directly they avoid inclusion on Spousal estate
  • At survivor death estate pass asset to beneficiary partially Estate tax free
  • Unfunded uses annual gifts from Grantor to pay premiums

Donor Advised Fund

  • Separately identified fund held and administered by Public charity
  • Client makes contribution for immediate tax deduction
  • Client serves as Advisor to fund

Dynasty Trust

  • Transfer wealth to Grandchildren free of generation skipping transfer tax

Grantor Retained Annuity Trust

  • Donor sets up Trust as annuity, receiving annual payment for fixed period
  • At end of annuity period remainder passes on to trust beneficiary as gift
  • Trust beneficiary must be family member

Intentionally Defective Guarantor Trust / IDGT

  • Asset protection device structured to protect personal residence
  • For tax purposes IDGT is disregarded as entity when Grantor makes transfer to IDGT irrevocable grantor trust
  • Client sells residence to IDGT for fair market value in exchange for an installment note, enters into lease with IDGT to live in residence paying (FMV) non-deductible rent to IDGT (not considered income)
  • IDGT pays the Client annual installment payments via installment note (not considered income)
  • If property has mortgage IDGT makes mortgage payments which are deductible to Client / Grantor as if house is owned individually

In-Trust For (ITF)

  • An account tool for parents and grandparents to set aside funds for minors, to make investment decisions and to potentially split income for tax purposes

Irrevocable Living Trust

  • Estate planning tool transferring assets for purpose of tax savings
  • Upon death proceeds bypass probate

Irrevocable Life Insurance Trust

  • Purpose is to pass Life insurance proceeds Estate tax free to beneficiaries
  • Funder transfers income generating assets to trust to pay premiums

Revocable Living Trust

  • Deed property to heirs, but Grantor retains control during lifetime
  • Upon death proceeds bypass probate
  • Upon death Beneficiaries entitled to tax advantages of Irrevocable Trust

Spousal Lifetime Access Trust (SLAT)

  • Estate planning tool for a wealthy married couple wishing to reduce estate taxes and to protect assets from creditors
  • A SLAT is an irrevocable trust that one spouse establishes for the benefit of the other spouse, and if properly structured, the assets in a SLAT are not taxable in either spouse’s estate and are not available to either spouse’s creditors
  • Simultaneously the beneficiary-spouse may receive distributions of income and / or principal from the SLAT and thus will benefit from the gifted assets