Are There Different Types of Trusts?
There are many different types of trusts. Listed below are the most popular trusts each pertinent to specific situations:
• Marital / “A” Trust – This type of trust is designed to provide benefits to a surviving spouse.
• Bypass / “B” Trust – Also known as the “credit shelter trust,” this type of trust is established to bypass the surviving spouse’s estate so the spouse can receive federal estate tax exemption.
• Testamentary Trust – This type of trust is outlined in a will and created through the will after death. Funds are subject to probate and transfer taxes.
• Charitable Lead Trust – This type of trust allows certain benefits to go to a charity with the remainder going to your beneficiaries.
• Generation-Skipping Trust – With this type of trust, assets can be distributed to grandchildren or later generations without incurring a generation-skipping tax or estate taxes when your children die.
• Qualified Terminable Interest Property (QTIP) Trust – This type of trust provides income to a surviving spouse. When the spouse dies, the remaining assets will go to additional beneficiaries who are named by the deceased.
We recommend you consult with an attorney, Certified Public Accountant (CPA) or another financial professional specific to your circumstances. Depending upon your situation they may advise you to get an appraisal for a trust.