If used correctly, trusts provide flexibility and control over your

 assets when you die.  Since I began to practice law in 1988, I have

 used trusts in a variety of situations, such as the following:


   1.       Credit Shelter Trust (A-B Trust):           This trust enables you to utilize

     your exemption from estate tax, which is $2 million for 2008.   So the first

     $2 million of your assets avoid estate tax.  However, you must include

     language in your Will in order to utilize this exemption.



2.   QTIP Trust (Qualified Terminable Interest Property):      You are able to


 control the remainder of your assets in excess of your exemption by


 transferring them to this trust.  This trust may be beneficial where an


 individual has multiple marriages or where a surviving spouse has


 limited financial experience and  a trustee will be appointed for the


 surviving spouse’s benefit.



3.    QDOT Trust (Qualified Domestic Trust):           If one or both spouses are


 not US citizens, the rules are different.  A QDOT allows for assets to be held


 in trust for the noncitizen spouse without incurring an estate tax, thereby


 deferring the tax until the spouse's death or the assets are withdrawn. 


 Technical requirements must be satisfied in order for a surviving


 noncitizen spouse to use the unlimited marital deduction.



4.     Disclaimer Trust: A disclaimer is the refusal to accept benefits conferred


 by will or by operation of law.  A disclaimer enables a surviving spouse to


 transfer assets to the trust by disclaiming ownership in those assets. 


 Disclaimed property is transferred to the trust without being taxed.



5.     See-Through Trust:    If the trust qualifies as a "see-through trust," the IRS


 permits the use of the oldest trust beneficiary's life expectancy for


 purposes of required minimum distributions. This is especially beneficial


 when the trust is for minor children. Since they most likely are


 significantly younger than you, they can benefit from a much longer


 applicable distribution period.  Indeed,   they have the potential for


 decades of tax-free growth of your assets.



 6.   Irrevocable Life Insurance Trust:       An irrevocable life insurance trust is


 created to own life insurance so that the benefit paid upon the death of


 the insured in not included in the insured’s estate and therefore avoids


 estate taxation.



  7.     Special Needs Trust (Supplemental Needs Trust):        This trust enables an


 individual with a mental or physical disability to have assets held in trust


 for his or her benefit.  This trust provides for supplemental and extra care


 over and above that which the government provides.  Monies held  by the


 trust are a noncountable resource and allow the disabled individual to


 qualify for available benefits and programs.


    8.  Living Trust (Revocable Trust):     The two most often-cited

     advantages of a living trust are its role in the event of the grantor’s

     incapacity and the avoidance of probate upon the grantor’s death.   The

     living trust typically provides that in the event of the grantor’s incapacity,

     a successor beneficiary automatically takes over the administration

     of trust property, thereby avoiding  public guardianship proceedings.


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