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Trusts are legal entities that function as corporations do. They may allow you to save on some estate taxes, as well as help minimize the amount of estate taxes paid. They allow you to continue to con- trol your assets, both while you are living and after you have passed away. Plus, trusts can specify how the trust’s money can be spent. There are different types of trusts, including revocable, irrevocable, living and bypass trusts.

In some instances, trusts can take the tax burden off of an indi- vidual, who may be in a higher tax bracket, and shift it to the trust, or its beneficiary. However, the government has sought to limit the amount of tax savings that can occur through trusts. For instance, the beneficiary of certain types of trusts must be at least 14 years of age, or else the income is taxed at the grantor’s (person who transfers the property into the trust) tax bracket. But, trusts may allow for a sig- nificant estate tax savings by removing the property out of the grantor’s estate, much to the benefit of future generations, without incurring any federal estate taxes.

While setting up a trust, you will need to select who you will want to be your trustees. A trustee acts for the trust, and will be required to make any decisions regarding the trust. Many times, I have seen where it is advised that trustees be from a corporate setting (i.e., a trust com- pany or bank that has been authorized to oversee the trust), but I feel that these third parties won’t understand your family and your wishes. It’s true that a trustee needs to be able to make impartial decisions, should have sound business knowledge, and should have some skill in investment and/or trust management. But it’s also important to have a family connection to your trust. Corporate trustees may charge a very high maintenance fee for their services, all the while not doing any- thing to benefit the trust. If you have a family member who is experi- enced with investments and business, and you trust that person, have him or her act as a trustee. If you don’t have anyone that has the expe- rience, consider having a corporate trustee and a family member act as cotrustees, so that one cannot make all the decisions.

Revocable and Irrevocable Trusts When the grantor wishes to retain control over the assets placed in the trust, as well as the right to change, amend or even terminate the trust,

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