Ademption refers to the destruction or extinction of a testamentary gift because the bequeathed assets no longer belong to the testator at the time of their death. This occurs when the property that was the subject of a specific bequest is...
trusts
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Child’s trust refers to a trust fund created for kids, usually by family members, in order to have the assets managed until the children mature. These trust funds can be created to operate in a variety of ways. The trustee can be given...
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Exemption trusts (also called a bypass trust, AB trust, or a credit shelter trust) are a tool used by well-off married individuals to legally maximize their estate tax exemptions.
The strategy involves creating a trust or...
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Family pot trusts (also called discretionary or sprinkling trusts) are a type of trust where the trustee is allowed to disperse funds according to the needs of the beneficiaries. Family pot trusts are created by parents for their children,...
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Fixed trusts (also known as non-discretionary trusts) are trusts where the trustor specifies how the assets are to be distributed exactly. Trustees in a fixed trust must manage the assets for financial success, but they do not have the...
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Formula AB trusts are simply AB trusts that do not exceed the applicable exclusion amount. AB trusts are a tool used by well-off married individuals to legally maximize their estate tax exemptions.
The strategy involves...
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Funding a trust refers to the process of transferring assets to a living trust after the entity has been created. Once a living trust has been established, the trustor may choose when to add assets to the trust, with some adding more over...
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Generation-skipping trusts are trusts that used to be created in order to make large gifts or bequests to younger generations without incurring estate and gift taxes that otherwise would apply. After the generation-skipping transfer tax was...
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Grantor-retained income trust (GRIT) is an old form of Grantor-Retained Trust set up by individuals to reduce taxes on an estate. To create a GRIT, a grantor creates an irrevocable trust that is for a limited period of time, paying taxes at...
(Wex page)
Grantor-retained trusts are irrevocable trusts created to reduce estate taxes. With each, the grantor receives some form of income from the trust for a set amount of years, and then the property is transferred to a beneficiary free of estate...