Are there different forms of trusts?
Yes. To best organize your assets into a trust, the following forms are recommended:
Charitable trust. Grantors can benefit from this action during their lifetime by setting aside income for charity. For example, if you set up a charitable trust, it can minimize income taxes. Individuals can deduct these assets from their taxes and will receive different benefits depending on state tax laws.
Irrevocable trust. Those who want to dedicate their trusts to future generations can set up a trust for them in an irrevocable fund. This means the trust cannot be changed, but the grantor can still divide up his or her assets as desired.
Revocable trust. On the other hand, a revocable trust can be accessed and changed throughout the grantor’s lifetime, but it is essential to attend to life changes in order to ensure that the trust is modified in the right ways.
What are the benefits of trusts?
Ultimately, a trust gives you more control over the distribution of your assets because you, as the grantor, have the ultimate say in where your money and property goes and to whom. Those with larger portfolios can set up trusts while still young, active and alert without worrying that they will have to make difficult decisions later in life.
A trust can allow both the grantor and beneficiary to feel financially secure, even if neither will take advantage of assets for many years. Individuals who like to plan ahead will find trusts key to their long-term wealth management plans.
The information in this article is for general information only and is not intended to provide specific legal, tax, or other advice or recommendations. Please consult your attorney, accountant, tax or financial adviser with regard to your specific situation.
Curtis Groves is senior vice president, Texas Trust Administration for the Wealth & Institutional Management Division of Comerica Bank in Dallas, Texas. Comerica Bank is a commercial banking subsidiary of Comerica Incorporated (NYSE: CMA), the largest banking company headquartered in Texas. In addition to Dallas/Fort Worth, Comerica Bank locations in Texas can be found in Austin and Houston. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.
