Six Types of Trusts

Our dedicated legal team at Legacy Law Centers understands that there is a wide range of trusts you can include in your estate plan. And while choosing the right type of trust to protect your assets can seem daunting, we are here to listen to your concerns and devise a plan that is tailored to your unique situation. Below, we discuss six common trusts to help you gain a better understanding of your options.

Special Needs Trust

A special needs trust allows you to leave money or property for the benefit of an individual with special needs without disqualifying them from government benefits. Under federal laws, special needs beneficiaries can receive certain types of benefits from a properly funded trust without becoming ineligible for government benefits.

Irrevocable Life Insurance Trust

An irrevocable life insurance trust can be set up to own high-value life insurance and to receive the payment of the death benefit when the trustmaker dies. With this type of trust, the life insurance proceeds are excluded from the deceased’s estate for tax purposes. However, the proceeds are still available to provide liquidity to pay taxes, equalize inheritances, fund buy-sell agreements, or provide an inheritance.

Marital Trust

A marital trust is designed to protect the accounts and property for the surviving spouse’s benefit. Marital trusts are also used to qualify for the unlimited marital deduction. The accounts and property held in trust are excluded from estate tax when the first spouse dies but is included in their estate for tax purposes.

Charitable Lead Trust

A charitable lead trust allows you to provide income to a charity for a period of years or a lifetime. Whatever is left in the trust goes to you or your loved ones with significant tax savings.

Charitable Remainder Trust

A charitable remainder trust is a trust that provides a stream of income to you for a period of years or a lifetime and then gives the remainder to the charity of your choice with significant tax savings once the period of years or death has occurred.

Testamentary Trust

A testamentary trust is a type of trust that is created in a will. Testamentary trusts are created upon the individual's death and are commonly used to protect the money and property on behalf of a beneficiary instead of transferring the money and property to the beneficiary outright.

If you would like to add one of these trusts to your estate plan, then please don’t hesitate to call Legacy Law Centers at (571) 200-5559 to request your complimentary consultation.

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