trusts

A trust set up for children in which the trustee has the discretion to spend money as needed, rather then equally on all the children (for example, if one child has special needs, the money may be directed towards that child).  The trust usually ends when the youngest child reaches 18 or 21.

A trust in which the trustee has limited discretion in management of the assets or distributions to the beneficiaries.  Also known as a fixed trust.

Definition

A business arrangement in which the investor serves as the "grantor" of the trust, and gives management authority to a trustee.  The investor / grantor's liability is limited to their investment (the trust property), thus this is a similar arrangement to a limited partnership.

Note that "Massachusetts Trust" is an informal term, and the trust need not have any connection to Massachusetts. Also known as an unincorporated business organization, or UBO.

See also

• Trust
• Limited Partnership

Also known as inter vivos trust, a living trust is a trust that is created and funded during the settlor's lifetime (as opposed to at their death).

A trust in which the terms can not be amended or revised.

A form of Grantor-Retained Trust, the Grantor-Retained Unitrust Trust (commonly referred to as GRUT) is set up when a donor makes a donation to a trust.  For a fixed period of time, the donor will recieve annual payments of a fixed percentage of the net fair market value of the trust assets (determined annually).  At at the end of the time the remaining value of the trust will be passed to the beneficiary.

A form of Grantor-Retained Trust, the Grantor-Retained Income Trust (commonly referred to as GRIT) is set up when a donor makes a donation to a trust.  During the fixed period of time, the donor will recieve income payments. At the end of the time the remaining value of the trust will be passed to the beneficiary.  

A GRIT is an irrevokable trust.

These are irrevocable trusts that reduce estate taxes.  With each, income from the trust proprety is kept for a fixed period of years, and then the property is tranfered to a beneficiary.  These trusts are for wealthy poeple who are prepared to give away substantaial amounts of property.  There are three types:

A form of trust designed to minimize estate taxes in which the property is transfered from an individul to their grandchildren, skipping over the children (and thus avoiding the transfer taxes that would occure when the property moved from the children to grandchildren).  See Generation-Skipping Transfer.