Common Trusts That Are Available
Revocable Living Trust
- Avoids probate of the estate, so no court is involved;
- Eliminates the requirement of public notices;
- Keeps your plan of distribution private;
- Is acceptable in all states, so avoids probate of out-of-state property as well as assets located in the state of residency. (A will requires probate in each state where real estate is owned and in the state where the decedent lived on the date of death);
- Provides for management of assets by a family member or an institution (whichever you select) if you are unable to manage assets due to health problems and avoids proving incompetency in a court proceeding;
- Helps in organizing lists of assets for personal financial planning and helps beneficiaries in locating assets;
- Allows for optimum tax planning using federal and state income, gift, and estate tax law, yet requires NO extra tax returns or filings;
- Does not affect your ability to manage and control your property and does NOT require management fees to be paid to anyone unless you wish to appoint an outside manager.
Credit Shelter Trust
- Definition of ‘Credit Shelter Trust – CST’
A type of trust that allows a married investor to avoid estate taxes when passing assets on to heirs. The trust is structured so that upon the death of one spouse, the assets specified in the Revocable Trust agreement (up to a specified maximum dollar value) are transferred into a Credit Shelter Trust for the benefit of the surviving spouse and then to the children/beneficiaries. The key benefit of this type of trust is that while the spouse is alive, the spouse receives all income for life and has access to the principle if she/he needs it. Upon second death, the proceeds in the Credit Shelter Trust pass estate tax free to the children/beneficiaries.
This type of trust is also referred to as an “AB Trust and will double the tax exemption available to each family”.
For couples with assets over $1,000,000 in assets (including life insurance), a simple will is not going to be sufficient!
Other Special Trusts to Consider
- Irrevocable Trusts
- Qualified Personal Residence Trusts
- Charitable Trusts
- Life Insurance Trusts
- Supplemental Needs Trusts
- Testamentary Trusts