Revocable Trust: Also known as a “living trust” or “inter-vivos” trust, a Revocable Trust is one that is created during the lifetime of the Grantor. The Grantor retains he right to make alterations to the trust and take back the assets if he so chooses. This trust type can help you avoid probate, but its revocable nature diminishes any potential tax savings.
Irrevocable Trust: An Irrevocable Trust is just that, a Trust that the Grantor cannot alter or take back. This trust type can establish many benefits, including tax savings and asset protection, but its permanent nature requires careful planning and execution. There are several specialized subtypes of Irrevocable Trusts, such as an Irrevocable Life Insurance Trust (“ILITs”) that can operate as a powerful alternative investment vehicle. Other specialized irrevocable trusts useful for wealth transfer include Intentionally Defective Grantor Trusts (“IDGT”), Grantor Retained Annuity Trusts (“GRAT”) and Qualified Personal Residence Trusts (“QPRT”).
Special Needs Trust: A special needs trust allows a physically or mentally disabled person to receive income without becoming ineligible for public assistance such as Social Security, Medicaid, or other state and local benefits. Many of these benefit programs have income eligibility or offset requirements that can become quite burdensome if not handled properly.
Forming a Special Needs Trust is a similar process to other estate planning vehicles, however special care needs to be taken to ensure that it will accomplish the desired goal.
Charitable Trusts: Charitable Trusts are a good option for those that wish to maximize the tax benefits of their philanthropic gifts and acts. There are two primary types of Charitable Trust, the Charitable Remainder Trust and the Charitable Lead Trust.
The Charitable Remainder Trust is a vehicle which allows philanthropic individuals to generate income from an irrevocable gift and get a tax benefit. A noncharitable beneficiary receives income for a set period of time (or lifetime) after which the remaining trust assets are transferred to a charitable beneficiary.
The Charitable Lead Trust is essentially the reverse of a Charitable Remainder Trust. Payments are made out of the trust to a charitable beneficiary for a set period of time, after which the remainder is transferred to a noncharitable beneficiary. The periodic payments reduce the overall tax burden owed by the ultimate beneficiary.
Other Trusts: There are many other specialized trusts that we can tailor for you at Guardian Litigation Group. Whether you need a Gun Trust, Realty Trust, IRA Beneficiary Trust, or something completely customized and outside the box, Guardian has the experience and drive to create it for you! Reach out today!