Wills & Trusts

Life Insurance Trusts
This trust is structured to retain a life insurance policy without the death benefit impacting the estate. Used in Estate Planning to replace the death tax

Revocable Living Trusts
Used to avoid probate and the expenses associated with it. A revocable trust can be changed or terminated at any time by the grantor. This trust does not reduce estate taxes.

Irrevocable Trusts
Assets in the trust are no longer controlled by the grantor and thus are excluded from estate tax liability. Also used for "Estate Freezing"

Credit Shelter Trusts/Bypass trust
This trust allows the surviving spouse access to interest and some principal of the trust with the remainder passing to other individuals at the surviving spouse's death. This type of trust utilizes the "exemption equivalent" as a credit to the estate taxes

Q TIP Trusts
Similar to the Credit Shelter Trust/Bypass trust but usually is employed in situations where the grantor has beneficiaries from an earlier marriage

Grantor Retained Interest Trust (GRIT)
This planning technique allows the grantor to transfer assets, such as a home, to a trust and retaine a fixed payment or percentage of income for a number of years after which the remaining trust assets pass to other beneficiaries. This helps reduce the value of the remaining interest in the property thus reducing estate tax. Tax laws have restricted this technique.

Grantor Retained Annuity (GRAT)
Same as GRIT except the payment to the grantor is fixed along with the payment period.

Grantor Retained Unitrust (GRUT)
Same as a GRAT except the income is a fixed percentage.

Charitable Remainder Trust (CRT)
A Charitable remainder trust is an irrevocable trust which pays a fixed amount (CRAT) or a fixed percentage (CRUT) each year to a beneficiary, such as a donor of the trust. After the death of the income beneficiary the remaining assets are distributed to a charity. The donor receives two tax benefits an immediate reduction of income tax for a charitable contribution, and removing assets from your estate thus lessening estate liability.

Charitable Lead Trust
Similar to above but in this case the fixed percentage goes to the charity at the death of the donor or at the termination of the trust the beneficiaries receive the principal. This gives current tax deduction for the interest paid plus reduce estate tax by estate freezing.

Asset Replacement Trust
A special trust used for estates where a fixed asset, such as a business, is being left to one child. In order to give the remaining heirs a fair share the trust buys a life insurance policy on the life of the donor with the death benefit going to the heirs not receiving the fixed asset.

Special Minor Trusts
Frequently used by parents of handicapped or disabled children to insure their rights to the parent's estate without sacrificing available public services

Spendthrift Trust
Designed to provide income to beneficiaries who have trouble managing money wisely. The trust limits the beneficiaries' ability to transfer assets and the beneficiaries' creditors cannot reach the trust.

Disclaimer Trust
This trust allows a surviving spouse to file a qualified disclaimer over a portion of the estate passed to the survivor. This is frequently used when a decedent's estate is overqualified for the unified credit. The assets are disclaimed by the spouse and then flow to the trust.

Standby Trust
This trust is specifically structured to take effect if the grantor becomes temporary or permanently disabled.