Can a trust have a sub trust?
A trust may be created during life, either as a revocable trust or an irrevocable trust. Or a trust may be created under a Will. Regardless of the attributes of the instrument creating the trust, different sub-trusts may be created under the trust.
What is the purpose of a sub trust?
The trustee can still purchase assets that benefit the spendthrift. The entire intent of this type of trust is to protect the nest egg from financial mismanagement and provide ongoing support for the beneficiary. This trust can be a subtrust of a revocable living trust.
What is a sub trust of a trust?
Sub-trusts could be formed under the terms of the trust to be held and administered for individual beneficiaries. Typically, these sub-trusts are not created until a specific time set forth in the trust document.
Are sub-trusts irrevocable?
Of these three sub-trusts, the Bypass Trust and QTIP Trust are irrevocable. The Survivor’s Trust is revocable.
Are administrative trusts irrevocable?
A trust may be created during life, either as a revocable trust or an irrevocable trust. Upon death, a temporary Administrative Trust may be created to pay expenses prior to splitting as directed by the instrument.
How does a trust work for dummies?
A trust agreement is a document that spells out the rules that you want to be followed for property held in trust for your beneficiaries. Common objectives for trusts are to reduce the estate tax liability, protect property in your estate, and avoid probate.
What can a sub trust be used for?
Sub-trusts may be used to preserve federal estate tax credits for one spouse. As trustee, you may have to determine which assets should be placed into a credit shelter sub-trust and follow through with funding the sub-trusts with those assets.
When is a trustee responsible for a sub-trust?
While a trustee may hope that all of the trust funding was accomplished prior to the settlor of the trust passing away, there are many instances where he may be tasked with this responsibility. These examples include the following: Sub-trusts typically do not come into existence until after the creator of the trust has passed away.
When to choose productive assets for a sub trust?
The assets of a trust that may be unproductive. In some cases, such as when the beneficiary of the sub-trust is entitled to income from the assets, it may make sense to choose productive assets for certain sub-trusts and reserve unproductive assets for the other sub-trusts.
Who is responsible for funding a credit shelter sub trust?
As trustee, you may have to determine which assets should be placed into a credit shelter sub-trust and follow through with funding the sub-trusts with those assets. Funding the Sub-trusts may be used to protect trust assets from creditors or during divorce or bankruptcy proceedings of one or more beneficiaries.
Sub-trusts may be used to preserve federal estate tax credits for one spouse. As trustee, you may have to determine which assets should be placed into a credit shelter sub-trust and follow through with funding the sub-trusts with those assets.
While a trustee may hope that all of the trust funding was accomplished prior to the settlor of the trust passing away, there are many instances where he may be tasked with this responsibility. These examples include the following: Sub-trusts typically do not come into existence until after the creator of the trust has passed away.
Who are the beneficiaries of a family trust?
In my world, a “family trust” normally refers to a joint tenancy revocable trust (think husband and wife) as grantors (settlors), trustees and beneficiaries (trustee and beneficiary during life times). When just one individual is involved it’s normally called living trust, revocable trust, grantor trust, etc.
Is it easy to set up a family trust?
A family trust is a relatively easy document to prepare and account for, particularly with the help of an estate planning attorney. Transferring asset ownership to the trust is an easy task. The ability to amend and adjust the terms at any time makes it a very versatile vehicle.