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Non-Charitable Trusts

Regular Irrevocable Trust

A regular irrevocable trust is a non-charitable gift plan defined by federal tax law that allows an individual to transfer assets to family members at reduced tax cost.

The donor irrevocably transfers assets, usually cash or securities, to a trustee of her choice, such as a bank trust department. The amount transferred into the trust is treated as a taxable gift from the donor to the beneficiaries of the trust. During the trust's term, the trustee invests the trust's assets. The trust's term is set by the donor.

Qualified Personal Residence Trust (QPRT)

A qualified personal residence trust (QPRT) is a special form of irrevocable trust that an individual funds with his or her personal residence.  During the trust term, typically the donor's lifetime, the donor may continue to live in the residence. When the trust terminates, ownership of the residence passes to heirs named by the donor in the trust instrument.

Marital Trust (QTIP)

The QTIP trust is a special kind of irrevocable testamentary trust that qualifies for the unlimited marital estate tax deduction and therefore incurs no transfer taxes at the time it is created. The trust is created in one spouse's will for the benefit of the surviving spouse during its term. The trust gives the spouse the right to all of its earned income for life. In addition, the trustee may be given the power to distribute trust principal to the spouse as necessary. When the trust terminates, typically at the death of the surviving spouse, the remaining principal is distributed to heirs

Crummey Trust

Named after the taxpayer who established the tax treatment of this kind of trust in tax court, a Crummey trust is a special kind of non-charitable irrevocable trust. The trust is designed to give its beneficiary just enough access to its assets that contributions made to the trust on the beneficiary's behalf qualify for the annual gift tax exclusion. The annual gift tax exclusion in 2015 is $14,000.

Credit Shelter Trust

The credit shelter trust is a simple and popular estate planning tool for married couples.

Many married couples have no will or a simple will that states that all the assets of whoever dies first shall pass to the surviving spouse. Either situation may waste the gift tax credit that is available to both spouses in a married couple, since transfers between couples are already sheltered from these taxes by the unlimited marital deduction.

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