trusts

Ademption refers to the destruction or extinction of a testamentary gift because the bequeathed assets no longer belong to the testator at the time of their death.

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Child’s trust refers to a trust fund created for children, usually by family members, in order to have the assets managed until the children mature. These trust funds can be created to operate in a variety of ways.

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Exemption trusts (also called a bypass trust, AB trust, or a credit shelter trust) are a tool used by well-off married individuals to legally maximize their estate tax exemptions. 

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Family pot trusts (also called discretionary or sprinkling trusts) are a type of trust where the trustee is allowed to disperse funds according to the needs of the beneficiaries. Family pot trusts are created by parents for their children, usually in case something were to happen to them.

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Fixed trusts (also known as non-discretionary trusts) are trusts where the trustor specifies how the assets are to be distributed exactly. Trustees in a fixed trust must manage the assets for financial success, but they do not have the ability to change what the beneficiaries receive.

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Formula AB trusts are simply AB trusts that do not exceed the applicable exclusion amount. AB trusts are a tool used by well-off married individuals to legally maximize their estate tax exemptions. 

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Funding a trust refers to the process of transferring assets to a living trust after the entity has been created. Once a living trust has been established, the trustor may choose when to add assets to the trust, with some adding more over time.

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Generation-skipping trusts are trusts that used to be created in order to make large gifts or bequests to younger generations without incurring estate and gift taxes that otherwise would apply.

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Grantor-retained income trust (GRIT) is an old form of Grantor-Retained Trust set up by individuals to reduce taxes on an estate. To create a GRIT, a grantor creates an irrevocable trust that is for a limited period of time, paying taxes at the outset of the trust.

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Grantor-retained trusts are irrevocable trusts created to reduce estate taxes.  With each, the grantor receives some form of income from the trust for a set amount of years, and then the property is transferred to a beneficiary free of estate taxes. These trusts are used mostly

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