Check out the benefits that come with our most common trusts.
Type of trust or account
|Beneficiary||Tax benefits?||Other Benefits|
|Revocable living trust||Grantor, possibly grantor's spouse||None||Professional asset management, continuous financial protection upon incapacity. Avoids probate in many states.|
|Investment management account||Grantor, possibly spouse as well||None||Easy to set up, gain perspective of investment professionals.|
|Marital deduction trust||Surviving spouse||Full estate tax deferral in most cases||Spouse receives all trust income at least annually, may direct ultimate distribution of trust assets.|
|Qualified domestic trust||Surviving spouse who is not a U.S. citizen||Full estate tax deferral||Spouse must receive all trust income.|
|Qualified terminable interest||Surviving spouse and children||Full estate tax deferral||Especially appropriate for “blended families.” Children’s interests normally can’t be changed by spouse.|
|Bypass trust||Anyone, but usually family members||No federal estate tax, possible for decades||Surviving spouse may also be beneficiary.|
|Spendthrift trust||Usually children including adult children||None||Trust assets are protected from the beneficiary’s creditors.|
|Special needs trust||Disabled individual||None||May provide for enhanced quality of life while permitting continued government benefits.|
|Grantor retained income trust (annuity or unitrust interest)||Grantor and heirs||Income and estate||Grantor’s retained interest reduces gift tax exposure. Assets may be removed from estate taxation.|
|Charitable remainder trust||Grantor and/or family members, and a charity||Income gift and estate tax deductions||Income Interest may be a percentage of the trust’s value or a fixed dollar amount.|
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