If you'd like to set up a Trust of this nature, it's best to meet with a trust and estate attorney.
When a person with a significant amount of assets dies and transfers those assets to others, either through a Will or through the laws of intestacy, the transferred assets are subject to a federal estate tax.
Irrevocable Trusts are often established in order to protect assets when the beneficiary is under 18 years old, a person with a disability, or a financially irresponsible adult.
There are a number of specific Irrevocable Trusts (specifically a "Spendthrift Trust" and a "Special Needs Trust") that are designed to distribute funds according to a specified schedule, while keeping the remaining funds inaccessible to the beneficiary, the beneficiary’s creditors, or the beneficiary’s caretakers.
Find out more about Everplans » Because the assets in the Trust no longer belong to you, you cannot count them among your estate, and therefore you don't have to pay estate taxes on them.
Irrevocable Trusts are generally established in an effort to avoid or reduce taxes.
This article on Trusts is provided by Everplans — The web's leading resource for planning and organizing your life.
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Once these conditions are met, ownership is transferred from the trustee to the beneficiary.Any assets exceeding ,000 will be taxed through the United States Gift (and Generation-Skipping Transfer) Tax Return (Form 709).However, as we've already established, when you put your property into the trust it's no longer yours and therefore you don't have to pay estate taxes on that property.From the moment the transfer is executed, the trustee, and not the grantor or beneficiary, controls it until the period of time or conditions set forth by the grantor is satisfied. There are a variety of reasons for establishing this kind of transfer of assets.On the one hand, it is so the desires of the grantor are satisfied before the beneficiary becomes the owner of the assets.