October 9, 2013

Aside from an individual’s Last Will and Testament, a trust is probably the most popular estate planning tool. Trusts, which come in various forms, are often used as a vehicle for tax avoidance. Assets in certain Irrevocable Trusts often avoid taxation because, by putting them in such a trust, the owner relinquishes ownership of the assets to a trustee.

When considering whether an estate plan should incorporate a trust, it is important to consider what type of assets within the estate may be transferred to the trust. A recent article discusses certain types of trusts, and the assets that they hold. This is NOT an exhaustive list, but rather a ‘sampler’ of sorts.

1. Property and Land Trusts: These trusts can hold any sort of property or real estate, such as your residential home or an investment property.
2. Financial Asset Trust: This type of trust can hold a multitude of financial assets, such as stocks, bonds, and shares.
3. Life Insurance Trust: This type of trust holds a life insurance policy that is ‘written into trust.’ A life insurance policy that is ‘written into trust’ will be paid out to the trust, rather than an individual.

Many other assets, such as Business Interests (even S Corporations), Hotel Investments and Personal Property, can be written into appropriate trusts as well.