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Personal Finance

Different types of trusts

Knowing the different types of trusts can save you millions of dollars in estate taxes.

If you’re going to be leaving behind assets that are worth a large amount of money, then you might want to think about getting a trust fund instead of simply writing a will. The reason for this is that most estate taxes get very high once you are leaving more than a little money to your family members. There are a few other advantages of trusts – for instance, the money that is in a trust fund is not in any danger of being lost to lawsuits. This is due to the fact that technically, any money that is in trust has been given away to somebody who will hold it in trust for you. If you have a lot of assets, you can probably benefit from looking at the different types of trusts and picking the right one for you.

The live insurance trust is one of the most common types of trusts available. The reason for this is that this trust will enable your family members to get the amount they should out of both your remaining assets after you die, and your life insurance policy. If your life insurance policy pays out a good deal of money, your family could end up paying hundreds of thousands of dollars in estate taxes. However, if you set up a life insurance trust instead, your family will be able to get the money without paying estate or income taxes.

Another type of trust fund is the limited term trust. Essentially, this is one of the types of trusts that you should look at if your job or business is at risk of lawsuits. Basically, you pick the time limit for your trust fund, and any money that is in the trust fund will be safe from any lawsuits. This is a good type of trust fund for anybody who runs their own medical practice.

A third type of trust fund is the estate freeze trust. This fund will allow you to avoid estate taxes on your assets. Essentially, the assets are no longer considered a part of your estate. Therefore, none of the estate taxes will apply – but you’ll still be able to keep control of your assets through the trust fund.