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What Is A Totten Trust?

Tue, 29 May 2007 21:19:00 GMT

Setting up a Totten Trust is as simple as going to a bank and opening a Trust account by yourself. A Totten Trust is best for amounts of about $20,000 or less. Larger amounts could present problems in payment of estate taxes at your death, since the assets in these accounts are added to your taxable estate. A Totten Trust can be paid out quickly after your death with a minimum of formalities. Because the money transfers directly, you don`t need to choose a thirdparty Trustee. As with any other Trust, you keep your assets out of probate. You can revoke a Totten Trust at any time during your life, and the beneficiary can`t withdraw the money from the Trust account until you die.

What Is A Trust?

Tue, 29 May 2007 21:19:00 GMT

A trust is a fictitious legal entity that owns assets for the benefit of a third person (beneficiary). The Grantor of the Trust is the person who set up and gave money to the Trust. The Trustee of the Trust is the person charged with keeping the assets safe, invested properly, and finally distributed to the Beneficiary at the proper time. The Grantor can pretty much decide how the money must be kept (in interest bearing accounts, in real estate, or only in government insured FDIC accounts, etc.), and when it may be distributed (when the beneficiary is 18 years old; or one half when the beneficiary turns 18 and the other one half when the beneficiary turns 21, etc.). The Grantor of the Trust can also be the Trustee of the Trust, if the Grantor decides to set the Trust up in such a manner (e.g., Grantor sets him/herself up to be the Trustee of a Trust for his/her child).

What Is An Abstract Of Trust?

Tue, 29 May 2007 21:19:00 GMT

A condensed version of a Living Trust document, which leaves out details of what is in the Trust and the identity of the beneficiaries. An Abstract of Trust is normally used to prove to a financial organization or other institution that you have established a valid Living Trust, without revealing specifics that you want to keep private. In some states, this document is called a Certification of Trust.

What Is An Accumulation Trust?

Tue, 29 May 2007 21:19:00 GMT

A trust in which the income is retained and not paid out to beneficiaries until certain conditions are met. For example, if you create a trust for your child`s benefit that stipulates that he/she will not have access to the assets until he/she turns 21 or graduates from college.

What Is The Difference Between A Revocable Trust And An Irrevocable Trust?

Tue, 29 May 2007 21:19:00 GMT

A Revocable Trust is where the Grantor can change the terms of the Trust or even revoke the Trust altogether and take back all of the assets in the Trust. An Irrevocable Trust is where the terms of the Trust cannot be changed (i.e., the beneficiary cannot be changed), and that whatever assets are placed in that Trust cannot be withdrawn by the Grantor.

What Is The Qtip Trust?

Tue, 29 May 2007 21:19:00 GMT

QTIP trust stands for the qualified terminable interest property trust. It allows certain property to qualify for an estate and gift tax marital deduction even though it ordinarily would not qualify for such tax deductions. One type of QTIP property that can qualify for a marital tax deduction are trusts which provides income to a surviving spouse for life and after the spouse dies the remainder goes to the children. Please contact an attorney if you would like more information about this type of trust.

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