Tax-Saving AB Trusts
Wealthy married couples get a big tax break when it comes to the federal gift/estate tax. Together, they can transfer more than $10 million without owing federal gift tax or estate tax.
If you want to set aside money to pay for a loved one’s education, you could set up an educational trust.
A testamentary trust is a type of trust that does not go into effect until the grantor (the person who made the trust) dies.
A spendthrift trust protects trust property from an irresponsible beneficiary and his or her creditors.
A sprinkling trust (or spray trust) gives a trustee power to decide how trust funds will be distributed to beneficiaries.
Leaving an Inheritance for Children
When you leave money or property for a child to inherit, arrange for someone to manage it.
Life Insurance Trusts
If you own a life insurance policy on your own life, and you’re concerned about estate taxes, you may be able to use a life insurance trust to reduce the size of your taxable estate.
This oddly named trust is used by many wealthy couples, and is especially useful in second marriages.
Using QDOTs to Plan for Noncitizen Spouses
This kind of trust can defer estate taxes for wealthy couples.
Dynasty Trusts: Tying Up the Family Fortune Forever
But do you really want to handcuff your children to preserve money for great-great-great-grandkids?