An irrevocable life insurance trust (ILIT) is a life estate planning tool that can offer numerous benefits. In addition to lessening the estate tax burden, an irrevocable life insurance trust can avoid the necessity of selling off real estate or protecting beneficiaries from present and future creditors. You have to understand the basics of an…
Advantages of a Charitable Remainder Trust
A charitable remainder trust is an irrevocable trust agreement entered into by a person, called the donor or grantor, who wishes to donate money or property to charity, but who may need income from the property. The main purpose of this trust is to reduce taxes for the property owner, and a charitable remainder trust…
The Grantor Retained Annuity Trust
The grantor/donor transfers property into a trust (a GRAT) that provides that the grantor will receive each year a fixed annuity, usually for a term of years. At the end of the term, the remainder beneficiaries get whatever is left. The gift involved equals the theoretical value of the remainder, determined by using the discount…
What Is a Bypass Trust?
If you are in the process of planning your estate with your spouse, a bypass trust may be an excellent option for you. The purpose of the bypass trust is simple: It guarantees that your estate, if left to each other, will only be taxed once. For example, if a man and a woman have…
What is a Crummey Trust?
One of the downfalls of leaving a large estate to your children is the subject of estate taxes. These taxes can be considerable. Many people opt to gift money to their children to avoid paying estate taxes. Others set up trusts, in many cases Crummey Trusts in order to protect their estate and their children’s…
