Types of Trusts
Every trust is tailor-made to fit the financial needs and goals of the grantor. Here are some types of trusts and the general purposes they serve:
- Living (Inter-Vivos) Trust
- Created and funded during your lifetime. It can be revocable or irrevocable.
- Revocable Trust
- May be altered or terminated during the grantor’s life. Passed to beneficiaries only after the grantor’s death, then coverts to an irrevocable trust.
- Irrevocable Trust
- Cannot be modified. Can eliminate estate taxes. The trust is the owner of the assets.
- Trust Under Will/Testamentary Trust
- Created at the instruction of the will of the grantor and considered irrevocable. An effective estate-planning tool in providing for those who, because they are too young or otherwise not capable, cannot assume the responsibility of significant financial gifts.
- Life Insurance Trust
- Owns a life insurance policy or policies; provides for the reduction or avoidance of estate taxes.
- Charitable Trust
- Designed for gifts to a charity; achieves income and estate tax savings for the grantor.
- Special Needs Trust
- Provides for special or supplemental benefits to trust beneficiaries while preserving government benefits.
- Court Appointments