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Trusts: Not Just for the Silver-Spoon Set You don't need the wealth of Bill Gates or Warren Buffett ? or even need to be super rich ? to benefit from setting up a trust. Personal trusts are soaring in popularity as more Americans discover their myriad uses. Since 1998, personal trust assets have grown from $659 billion to well over $1 trillion.¹ Although the use of trusts involves a complex web of tax rules and regulations, the idea behind them is fairly simple: A trust is an entity separate from you that is designed to own assets that you transfer to it. Here are some examples of the various trusts available to you.
Special-needs trust: Can be used to help ensure that a disabled child remains eligible for government assistance that is based on the child's financial situation. The trust can control distributions to keep the child's income or net worth within eligibility limits. Revocable living trust: Often used to help avoid probate at death, as well as give control of your finances to a trusted individual without court involvement if you should become incapacitated. Before implementing any trust strategies, you should consider the counsel of an experienced estate conservation professional. But don't let that discourage you from taking advantage of the control and protection that a trust can provide. 1) The Wall Street Journal, December 24, 2005 |
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Qualified
terminable interest property (QTIP) trust: Helps control the
distribution of your assets after your death, regardless of changing family
circumstances. For example, if you died and your spouse remarried and had more
children, a QTIP trust would help ensure that only your children would
ultimately inherit your assets.