A Trust contains property. The legal and equitable titles to the property are divided. The trustee holds the legal title to the trust property. The beneficiary receives the benefit of the trust and the trustor is the person who creates the trust. The settler/grantor is the person who places property into the trust. Normally the Grantor, Settlor, and trustor are the same person.

There are two main categories of Trusts:

1.) The revocable trust can easily be changed at any time and can easily be terminated. It has limited asset protection features and relieves very little estate tax burden.

2.) The irrevocable trust is basically a separate being than either the grantor, trustee, or the beneificiaries. It is a supurb asset protection and estate planning tool, since the assets are no longer in your name, and you have no control over them, your creditors can not attach them and they are not part of your estate. The undistributed income of the trust is taxed at the trust's rates, and money distributed is taxed at the beneficiaries rates. An irrevocable trust can not be changed. To retain the irrevocable trusts status a third party needs to be the trustee.

Living Trust

A living trust is also called an Inter Vivos Trust. Everyone should have a living trust. A Living Trust should replace your will in proper estate planning. The Living Trust bypasses probate and the will does not. .

Advantages:

·    Eliminates probate and probate expense

·    Keeps assets in friendly hands

·    Revocable

Disadvantages:

·    Provides minimal asset protection

·    Start-up Costs

·    Re-titling your assets.

Childern's Trust

This trust is sometimes referred to as a Minor's Trust.

Advantages:

·  Provide money for College Funding

·  Reduce Income and Estate Taxes

·  Bypasses Probate

Disadvantages:

·  Lower amount of financial aid- This may lower the amount of financial aid that your child may be able to receive. This is because financial aid requires a person to provide a certain percentage of their own net worth toward the funding of their education.

·  Irrevocable

Q-Tip Trust

These types of trusts are formed upon your death and are especially suited for the special situations of providing for children of 2nd Marriages.

Advantages:

·  Provides Income for Spouse

·  Defer Estate Taxes

·  Control flow of assets- Through this process, you can provide an income for your spouse and yet make sure that your assets are dispersed to your heirs.

Disadvantages:

·  Spouse must receive income for entire life in order to receive estate tax deferral

·  Irrevocable

Charitable Remainder Trust

Advantages:

· Provide Retirement Income

· Avoid capital gains tax

· Reduce estate taxes

· Income tax relief

· Provide income for surviving spouse

Disadvantages:

· Irrevocable

· 10% of assets must be given to a charity yearly

· Complicated to Establish

Insurance Trust

Did you know that 40% of all estate taxes are collected by the government from life insurance proceeds? By using an Insurance Trust this unwanted burden can be alleviated.

Advantages:

· Eliminate Federal Estate Taxes- By the trust owning the insurance policy, it is not part of your estate and thereby is not taxed

· Provides Asset Protection

· Ensure Estate Liquidity from Life Insurance Proceeds:- By using the insurance trust, all of the money from the trust can be used as a way to pay for the estate taxes that are assigned to the estate.

· Flexibility of Choice of Insurance Policy

Disadvantages:

· Trust is Irrevocable

· Third Party Trustee