GIFTING TRUSTS
Gifting Trusts
An individual may want to make a gift to a child or family member, but they may be concerned with the ability of the recipient of the gift to appropriately manage the money or assets gifted, either because they are too young, or they would benefit of having the money managed for them. In lieu of making a gift directly to the beneficiary, the client may want to consider setting up a trust and contributing the gift to the trust.
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The client could appoint an independent trustee to manage assets held by the trust for the benefit of the beneficiary.
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The trustee could make distributions from the trust to the beneficiary, pursuant to the terms set forth in the language of the trust.
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The trust could provide that the beneficiary could serve as their own trustee at a stated age.
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The trust could be established for one or more beneficiaries.
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Other benefits of making a gift to a trust may include ensuring that the assets are protected from creditors of the beneficiary or failed marriages, or sheltering the trust assets from estate taxes when the beneficiary passes away.
These types of trusts are commonly referred to as Dynasty Trusts.