Trusts – Questions and Answers
Question 1: What is a trust? Answer: A trust is a legal relationship among persons that requires: (1) a person who creates and funds the trust (trustor), (2) a person who benefits from the income and principal in the trust (beneficiary), and (3) a person who manages the property in the trust and distributes income and principal according to the terms of the trust (trustee). Think of it as a contract. The governing instrument is the writing that contains the relevant provisions.

Wills Protect Your Family
WILLS AND TRUSTS PROTECT YOUR FAMILY The primary purpose of Wills and Trusts created in your Will, but not funded until after your death, is protecting your beneficiaries from themselves and creditors. Trusts created in your Will are called Testamentary Trusts.

Planned Giving Techniques
Planned Giving Techniques Supporting your house of worship or favorite charity (exempt entity) through gifts is a great way to reduce income and death taxes. Gifts may include cash and cash equivalents, securities, insurance policies, retirement plan assets, personal property and real property. Subject to rather liberal restrictions, you may deduct annual donations of money and short-term capital gain property to charity, up to 50% of adjusted gross income (AGI). Long-term capital-gain property is limited to 30% of AGI. In subsequent years, you may deduct the value of gifts in excess of these limitations.

Durable Power Attorney
Use A Durable Power of Attorney To Avoid Problems Although it does happen, it is a rare event when I suggest that a client not sign a Durable Power of Attorney (DPOA), a document that creates a legal, enforceable relationship between the person who signs it (known as the "principal") and the person who acts for the principal (known as the "agent," "attorney-in-fact," or "personal representative"). It is important to note that a DPOA is freely revocable at any time before you become incapacitated. After that, a judge who finds cause may revoke the authority granted in the DPOA.

Irrevocable Life Insurance
CONSIDER AN IRREVOCABLE LIFE INSURANCE TRUST (ILIT) TO REDUCE ESTATE TAXES Insurance on your life will be included in your taxable estate if either (1) Your estate is the beneficiary of the insurance proceeds, or (2) You possessed certain "incidents of ownership" in the policy within three years of your death. Incidents of ownership that will cause the proceeds to be taxed in your estate include the rights to: change beneficiaries, assign the policy, pledge the policy as security for a loan, borrow against the policy's cash surrender value, and surrender or cancel the policy. A life insurance trust is an effective way to keep life insurance proceeds from being taxed in your estate.