A Trust is a legal structure that owns whatever property
is placed in the Trust. The trustee, who is appointed
in the Trust, manages the Trust. A Trust may be included
in a Will (Testamentary) and is used for tax planning,
protection from creditors, poor management or divorce,
control over how the assets are used or spent, to provide
for the surviving spouse in a second marriage and also
provide for the children of the first or both marriages,
or to allow a disabled beneficiary to remain on public
benefits. A Trust may also be used while the individual
is alive (Inter vivos). This type of trust is used to
avoid probate, making gifts and to keep your life insurance
proceeds from counting as part of your assets for Federal
Estate Tax purposes.
Charitable
Trusts can become effective during life or at death.
The charitable remainder trust is similar to other types
of trusts except that it has a charitable beneficiary.
A donor transfers property under a Trust agreement that
specifies how the income and principal are to be distributed.
The donor or any individual of their choosing receives
income for their life or for a term of years and upon
death or the expiration of the term, the principal belongs
to the charity. There is fulfillment of philanthropic
goals as well as tax savings involved in the use of
Charitable Trusts.
