While needing to meet specific legal requirements to be effective, a pour-over will is a very useful estate planning tool. Pour-over wills are designed to work hand-in-hand with a revocable living trust. Here’s a look at how they work together… Continue Reading →
In this particular type of trust, QTIP stands for “Qualified Terminable Interest Property”. It is a beneficial type of trust, especially for couples who want to leave property to each other, while saving as much as they can on estate taxes.
A QTIP Trust is an Irrevocable Trust
All trusts can either be revocable (subject to change) or irrevocable. A QTIP Trust is irrevocable and used most often when leaving property to a surviving spouse, who will then leave that same property to their beneficiaries. Continue Reading →
Kids make mistakes, it’s part of growing up. However, when your kids are all grown up and still making mistakes, especially when it comes to finances, it can leave you with an uneasy feeling about passing along the family fortune. Leaving a large inheritance is one of the greatest generational wealth-building tools in our society. However, what do you do when the next generation is less than responsible? Or, what do you do when an adult child is mentally impaired in some way? Leaving a large amount of money could spell disaster. Weather its wealth that has taken a lifetime to build or has been passed on through generations, it could easily be lost in a short period of time. The answer for some is a spendthrift trust. Continue Reading →
A trust is a legal arrangement through which one person, called a “settlor” or “grantor”, gives assets to another person or institution, called a “trustee.” The trustee holds legal title to the assets for another person or institution, called a “beneficiary”. The rights of a trust beneficiary depend on the type of trust and the type of beneficiary.
While it may feel like it at times, trust beneficiaries are not at the absolute mercy of the trustee. Depending on the type of trust, trust beneficiaries may have rights to information about the trust as well as the right to ensure the trust is properly managed. Continue Reading →
In a previous Acorn, we looked at the holding in Mikel v. Commissioner, a Tax Court case in which the IRS lost yet another attempt to defeat Crummey powers. “Crummey powers” (so named after the landmark 1960’s tax case,
Crummey v. Commissioner) you may recall, are withdrawal powers built in to a family trust that permit one gift tax annual exclusion to be claimed for each trust beneficiary. Continue Reading →