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Many clients request information on Trusts. Trusts can be a valuable tool for your estate planning needs, depending upon the size of your estate and other special needs. In its basic definition, a trust is a written legal agreement in which you place assets or property in the name of a trust under the care and custody of an entity or person who manages the Trust for your benefit, known as Trustee, for the benefit of a third party.


Trusts can be classified as either revocable or irrevocable. In a revocable trust, the person who sets up the trust, known as the “settlor” or “trustor” retains the power during his or her lifetime to change or eliminate the trust. Revocable Trusts are typically used in conjunction with a person’s Will to provide Federal Estate Tax Planning for married couples.

As the name implies, an irrevocable trust, is a trust that cannot be amended or eliminated after it is set up. Irrevocable trusts are used primarily in the estate planning context as a valuable tool for removing assets from a person’s estate for Federal Estate Tax purposes.

In addition to tax savings, Trusts can be extremely useful in assisting those persons with special needs with preserving and protecting assets. Testamentary Trusts, which are trusts established in a person’s Last Will and Testament are helpful in ensuring that assets inherited by minor children are protected until the minors are of appropriate age to own them outright.

The following are examples of common trusts that are utilized by practitioners for estate planning & asset protection planning:

  1. Credit-Shelter or By-Pass Trust – set up in a will or in a separate revocable trust to assist married couples with Federal Estate tax savings.

  2. Testamentary Trust-used primarily by parents of minor children to insure that if they should pass away, assets passing to children under age 21 will be placed in a trust for their benefit and protection until they are of an appropriate age to own the assets outright.

  3. Irrevocable Life Insurance Trust- utilized by high net worth individuals to insure that the proceeds from life insurance policies will not be included in their taxable estate for Federal Estate Tax purposes.

  4. Special Needs Trusts – utilized by persons with special needs in order to avoid disqualification from such programs as medical assistance or SSI.



The Process:

  1. Meet with the client and review the confidential client questionnaire to determine the feasibility of a trust.

  2. Prepare initial trust draft for the client’s review.

  3. Follow up with client to discuss client’s review of the trust draft and make any revisions as needed.

  4. Meet with client to execute the trust and assist client with the proper funding of the trust, if applicable.

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