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August 15th, 2011

What is a Dynasty Trust?

(Estate Planners) - A dynasty trust is a type of generation-skipping trust that can provide substantial savings on estate tax. When you consider the fact that estate tax can climb to a rate that is as much as fifty-five percent, and that each generation will have to pay estate taxes, you could hypothetically save up to eighty percent of your estate throughout the course of three generations.

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August 8th, 2011

What is a Crummey Trust?

(Estate Planners) - Don’t let its name fool you; the Crummey trust is a very viable option in estate planning. The Crummey trust can be used to legally avoid the payment of estate or gift tax when transferring money or other assets to someone else. And as a bonus, the grantor (person establishing the Crummey trust) can still specify to a certain degree how the transferred money and assets are used.

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August 1st, 2011

What is a Complex Trust?

(Estate Planners) - All trusts must be classified in one of two ways for the purpose of paying federal income taxes – as a simple trust or a complex trust. Basically, a complex trust is one that cannot be classified as simple. In a nutshell, the complex trust is one that contains provisions for charitable gifts, an income stream, or concerns other types of wealth distribution.

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June 20th, 2011

What is a Pour Over Will?

(Estate Planners) - One type of testamentary instrument that is widely used in combination with a trust that was created during a person’s lifetime is a pour over will. A pour over will typically dictates that, when the testator passes away, all assets and property that they own that have not previously been transferred into the trust during the person’s lifetime automatically pour over into the trust.

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April 25th, 2011

What is a Life Insurance Trust?

(Estate Planners) - When planning an estate, many people assume that if they have adequate life insurance coverage that their heirs will be well provided for. This is not always the case as federal estate tax can eat as much as fifty-five percent of the wealth of your estate before your heirs receive a dime. The life insurance trust is a type of trust that is established specifically for the purpose of owning life insurance. If the owner of the life insurance policy is also the insured, the proceeds of the insurance policy will be subjected to the federal estate tax when the insured passes away.

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April 18th, 2011

What is a Grantor Retained Income Trust (“GRIT”)?

(Estate Planners) - A grantor retained income trust, which is also known by the acronym of GRIT, is a frequently used trust that can help to reduce the amount of estate tax that is due when a person passes away with a large estate. The Grantor retained income trust can also provide an income stream for the creator of the trust that provides a steady flow of money during their lifetimes while allowing their heirs to benefit from their wealth upon the trust creator’s death. Thus, the reason for the name, grantor retained income trust.

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March 7th, 2011

What is a Charitable Split-Interest Trust?

(Estate Planners) - A split-interest charitable trust will allow you to pass the wealth that you accumulate during your lifetime to your heirs in a manner that promotes tax efficiency while also allowing you to support your favorite charity, either now or on down the road. The split-interest charitable trust’s name is derived because the financial interest from these trusts is split between a charity and a non-charity (your heirs).

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February 14th, 2011

What is a Charitable Remainder Trust?

(Estate Planners) - Passing along the wealth that you accumulate in your lifetime can be challenging. You naturally want to leave your beneficiaries and loved ones well-provided for, but you do not want to see your money taken by the government in the way of estate tax and other tax when you pass away. You may also wish to see a favorite charity benefit from your estate.

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January 31st, 2011

What is a Generation Skipping Trust?

(Estate Planners) - A generation skipping trust is not just designed for the elite or wealthy. This type of trust provides a great way to safeguard any family’s assets from excess tax, creditors and ex-spouses looking for their “share” of the estate, just to name a few. The generation skipping trust also protects assets that might grow with time, like stocks.

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January 24th, 2011

What is a Credit Shelter Trust?

(Estate Planners) - A credit shelter trust is sometimes referred to as a bypass trust. The credit shelter trust is intended to allow married couples to take full advantage of the lifetime exemption for estate taxes and minimize federal tax on their combined estates. This trust allows each individual a one-time exemption from estate or so-called death tax and gift tax.

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