How to Use Trusts to Achieve a Special Purpose

Trusts are generally used to preserve and manage assets for trust beneficiaries, but there are certain trusts designed to help you achieve a special purpose, like caring for a special needs person, protecting assets from being spent unwisely or simply minimizing estate taxes.? Some special trusts include:

Crummey Trust:? designed to preserve assets for a child?s future use, this trust is generally used when a child is a minor or ill-equipped to deal with a financial windfall.? A Crummey Trust utilizes the annual gift tax exclusion -- $13,000 in 2012 or $14,000 in 2013 ? that the grantor places into the trust to preserve for future use by the beneficiary.

Totten Trust:? a simple trust established through a financial institution, where the account is in the grantor?s and the beneficiary?s names.? The grantor adds funds to the account during his or her lifetime, and when the grantor dies, the account automatically goes to the beneficiary.

Spendthrift Trust:? this trust features a special provision that prevents the beneficiary from squandering trust assets.? The trustee controls all distributions from the trust, protecting assets from creditors, divorce or a spendthrift beneficiary.

Special Needs Trust:? this trust is used to provide for the educational and/or discretionary spending needs for a person with special needs without jeopardizing his or her eligibility for governmental benefits.? A trustee manages the assets of the trust for the benefit of the special needs beneficiary.

An experienced Annapolis estate planning attorney can help you understand all your options for estate planning.? Experienced Estate Planning Attorney Seth B. Zirkle can discuss all your options and create a plan with you.? Call Mr. Zirkle at Hyatt & Weber, P.A. today at 410-505-4553.

Source: http://hyattweberestateplanning.com/maryland-trusts/how-to-use-trusts-to-achieve-a-special-purpose/

wii u wii u