Trusts

Charitable Lead Trust: A Charitable Lead Trust is one in which the income interest (or annuity or unit trust interest) is paid to the named charitable beneficiary(ies) and at the conclusion of the charitable term, the interest either reverts to the donor or to at least one non-charitable beneficiary chosen by the donor.

Charitable Remainder Trust: A Charitable Remainder Trust is one in which the income interest (an annuity or unit trust interest) is paid to the non-charitable beneficiaries and at the termination of the trust, the remainder of interest is transferred to the charitable beneficiary(ies).

Charitable Remainder Unit Trust: An irrevocable trust established for a term of years or for the lifetime of an individual or individuals that pays a fixed dollar amount each year to one or more non-charitable beneficiaries and, upon termination of the trust, pays the remainder to one or more charitable beneficiaries.

Charitable Remainder Annuity Trust: An irrevocable trust established for a term of years or for the lifetime of an individual or individuals that pays a fixed dollar amount each year to one or more non-charitable beneficiaries and, upon termination of the trust, pays the remainder to one or more charitable beneficiaries.

Clayton QTIP: a QTIP marital deduction trust contained in a will or revocable trust that is designed to permit alternative dispositions of the property transferred to the trust based upon whether the election to treat all or a portion of the trust as “qualifying terminable interest property” is made by the executor of the estate, with the election by the executor depended upon whether the election produces an optimal tax result.

Defective Grantor Trust or Intentionally Defective Grantor Trust: An irrevocable trust, all of the income of which, based upon its terms, is automatically taxed to the grantor or one of the beneficiaries of the trust under IRC section 671-679, but the principal of the trust is excluded from the taxable estate of the grantor upon the grantor’s death.

Disclaimer Trust: A trust contained (usually) in a will or a revocable trust that is designed to receive any property that is disclaimed by a beneficiary of such property, such that the property that would otherwise have been received by the disclaimant may pass to other beneficiaries (usually the heirs of the disclaimant) and will not be included in the estate of the disclaimant.

Dynasty Trust: A trust designed to last for as long as the Settler or the trust beneficiaries want the trust to last. Typically, the Rule Against Perpetuities prevented a Trust from continuing indefinitely. Many states have repealed the Rule, or substantially modified it. As such, a “Dynasty Trust” can continue for an extended period.

Grantor Retained Annuity Trust: An irrevocable trust established for a term of years providing for fixed annual payments from the trust to the grantor of the trust during the trust term, with the remainder payable to one or more other beneficiaries of the trust.

Grantor Retained Uni-trust: An irrevocable trust established for a term of years providing for annual payments for the trust based upon a percentage of the fair market value of the trust’s assets each year to the grantor of the trust during the trust term, with the remainder payable to one or more other beneficiaries of the trust.

Living Trust: Any trust, other than a business trust, intended as a will substitute by the settler which becomes effective during the lifetime of the settler, but from which trust distribution cannot be made to any beneficiaries other than the settler prior to the death of the dettler.

Qualified Personal Residence Trust: An irrevocable trust for a term of years which may contain only the principal residence or second home of the grantor of the trust, and provides that the grantor may occupy the residence or second home for the term of the trust, with the remainder interest payable to one or more other beneficiaries upon termination of the trust.

Special Needs Trust: An irrevocable trust for the benefit of a disabled beneficiary drafted in a fashion so as to avoid disqualifying the beneficiary from receiving means tested government benefits. Also know as a “supplemental needs trust,” as it provides benefits to the beneficiary that are not provided by governmental assistance.

Split Interest Trust: Charitable trusts have both charitable and non-charitable interests.