Trusts have many uses. They can provide for the careful management of your assets both during your lifetime (including any disability period) as well as after your death. A Trust can allow for controlled expenditures for minor children, disabled beneficiaries, to be tailored to the needs and opportunities of the beneficiaries without the intervention of a court. A Trust can provide for assets to pass outside the “probate” process, an advantage which is particularly valuable for real estate held in other states. Finally, if properly drafted, a Trust can provide significant tax advantages for future generations.

There are numerous types of Trusts, but they can be divided into two broad categories: Inter-Vivos Trusts and Testamentary Trusts. Inter-Vivos Trusts are Trusts created to be effective during one’s lifetime. On the other hand, Testamentary Trusts are created, typically in Wills, to be effective only after one’s death.

Inter-Vivos Trusts can be either revocable or irrevocable. Revocable Inter-Vivos Trusts are commonly called “Living Trusts,” and are often used to avoid probate and to provide for management of one’s assets in the event that one becomes disabled. Irrevocable Inter-Vivos Trusts are most commonly used for estate tax savings.

Other commonly-used types of Trusts, which can be either Inter-Vivos or Testamentary, include: Special Needs Trusts (for certain disabled beneficiaries); Qualified Marital Trusts or QTIP Trusts (to provide exclusively for spouses); Bypass Trusts (used to reduce death taxes); Generation skipping Trusts (for transfers to future generations); Charitable Remainder Trusts (which can generate a significant tax savings while also generating current income with the donor); Irrevocable Life Insurance Trusts (to hold certain life insurance policies); and Qualified Personal Residence Trusts (used to transfer personal residences to other family members while retaining use of the residence for a period of years). We would be happy to talk with you to see whether a Trust would be beneficial as part of your estate planning process.