🏦 Trusts

Legal arrangements where a trustee holds and manages assets for beneficiaries. — 15 terms

• A-B Trust

  An estate planning strategy where a married couple's trust splits into two trusts when the first spouse dies: Trust A (survivor's trust) and Trust B (bypass/credit shelter trust). This was designed to...

• Asset Protection Trust

  An irrevocable trust designed to protect assets from creditors, lawsuits, and judgments. Some states (like Nevada, South Dakota, and Delaware) allow self-settled asset protection trusts where the trus...

• Charitable Remainder Trust

  A trust that provides income to you (or other beneficiaries) for a set period, after which the remaining assets go to a charity. It provides an immediate income tax deduction and can eliminate capital...

• Dynasty Trust

  A long-term irrevocable trust designed to pass wealth through multiple generations without incurring estate or gift taxes at each generational transfer. It can last for centuries in states that have a...

• Grantor

  The person who creates a trust and transfers their property into it. Also called a trustor, settlor, or creator depending on the state. The grantor decides the terms of the trust.

• Irrevocable Trust

  A trust that generally cannot be changed or canceled once it is created. The person who creates it gives up control of the assets placed in the trust. This can provide tax benefits and asset protectio...

• Living Trust

  A trust created during your lifetime (as opposed to one created by your will after death). Living trusts help your estate avoid probate because assets in the trust pass directly to beneficiaries.

• QTIP Trust

  A Qualified Terminable Interest Property trust that provides income to a surviving spouse for life while preserving the remaining assets for other beneficiaries (typically children from a prior marria...

• Revocable Trust

  A trust that can be changed, amended, or completely canceled by the person who created it during their lifetime. Also called a revocable living trust. It becomes irrevocable when the creator dies.

• Rule Against Perpetuities

  A centuries-old rule that limits how long a trust can last. Traditionally, a trust must vest (become fully owned) within 21 years after the death of a person alive when the trust was created. Many sta...

• Special Needs Trust

  A trust designed to provide for a person with disabilities without disqualifying them from government benefits like Medicaid and Supplemental Security Income (SSI). The trust pays for supplemental nee...

• Spendthrift Trust

  A trust that protects the beneficiary's interest from creditors and prevents the beneficiary from selling or pledging their future trust distributions. It is designed for beneficiaries who might not m...

• Testamentary Trust

  A trust that is created by your will and only comes into existence after you die. Unlike a living trust, a testamentary trust does go through probate because it is part of your will.

• Trust

  A legal arrangement where one person (the trustee) holds and manages property for the benefit of another person (the beneficiary). Trusts can help avoid probate, reduce taxes, and protect assets.

• Trustee

  The person or institution responsible for managing a trust and its assets for the benefit of the beneficiaries. A trustee has a legal duty (fiduciary duty) to act in the best interests of the benefici...