Creating an estate plan can be overwhelming because of the myriad of trusts available. However, estate planning attorneys are very familiar with them because they deal with them every day. We know the different trusts and laws and are experienced in helping people find the best plan for their family situation. Here are ten of the most common trusts. These will give you a general understanding but do not include all the details of them. You do not need to remember them all. When visiting our office, we will design a plan that works best for your situation.
- Bypass Trusts.
Bypass Trusts bypass the surviving spouse’s estate and take advantage of tax exclusions providing asset protection. This trust is also called a Credit Shelter Trust, Family Trust, or B Trust.
- Charitable Lead Trusts.
Charitable Lead Trusts provide a stream of income to a charity by means of a split interest trust. This can be designated for a period of time or a lifetime. The remaining assets go to your beneficiaries.
- Charitable Remainder Trusts.
Charitable Remainder Trusts are also split interest trusts but this type provides income to you and the remaining goes to a charity. This can also be set up for a period of time or a lifetime.
- Special Needs Trusts.
Special Needs Trusts are carefully crafted for someone with special needs without disqualifying them from governmental benefits. Normally they would be disqualified but federal laws allow special needs beneficiaries to receive benefits from a specific trust and still allow them to be eligible for government benefits.
- Generation-Skipping Trusts.
Generation-Skipping Trusts allows for assets to be passed to your grandchildren or a later generation without having to pay the generation-skipping tax.
- Grantor Retained Annuity Trusts.
Grantor Retained Annuity Trusts are unaltered trusts that allow you to give a large financial gift to family members and limit the estate and gift taxes.
- Irrevocable Life Insurance Trusts.
Irrevocable Life Insurance Trusts protect life insurance proceeds from the deceased’s estate for tax purposes. The assets can still be used to pay taxes, equalize inheritances, fund buy-sell agreements or to provide an inheritance.
- Marital Trusts.
Martial Trusts provide asset protection and financial benefits to the surviving spouse. For tax purposes, trust assets are included in his or her estate.
- Qualified Terminable Interest Property Trusts.
Qualified Terminable Interest Property Trusts provide income to the surviving spouse and then to other beneficiaries upon the death of the surviving spouse. This trust gives tax planning flexibility and minimizes estate and generation-skipping tax. It is also used in second marriages.
- Testamentary Trusts.
Testamentary Trusts are created in a will and are not active until the death of the creator. They are commonly used to provide for a beneficiary that is too young, has medical or drug issues or prone to be a spendthrift. This trust also provides protection from lawsuits against the beneficiary.
With so many different types of trust available, it can be overwhelming to decide which is best for your family and situation. We are here to help find the best fit for you. Call us today!