100 Insurers Message Board

Subject: Re: Re: Credit sheter trust

Comments:
: : Is is common for a Credit Shelter trust to be a completely separate document from the original revocable trust document or is it a section of the original revocable trust document? : Here are my assumptions based on some research. : The purpose of a credit shelter trust is to leave an inheritance to someone AND bypass transfer taxes associated with that <a href="http://www.karlmagnus.com/credit_shelter_trust.htm">(Magnus)</a>. : A revocable trust doesn't have the tax advantages that an irrevocable trust has <a href="http://moneycentral.msn.com/taxes/glossary/glossary.asp?TermID=286">(MoneyCentral)</a>. : All trusts are contractual agreements between the grantor, trustees and beneficiaries <a href="http://www.socal.com/articles/574-7.html">(Wycoff)</a>. If an irrevocable trust contract is not written properly, it could result in unexpected and unwanted tax liabilities for the recipient or the grantor. : <a href="http://www.mindconnection.com/library/legal/trust_irrevocable.htm">Here is an example of an irrevocable trust contract<a/>. : So my answer to your question has to be no, it shouldn't be part of the original revocable trust document. Could it be? I suppose it could, but I could see problems arising if it were. What the taxman wants to see is a clear, unequivocal declaration of an irrevocable trust, and a safer way to establish that is through a separate document. : This post should not be taken as legal or financial advice, but I hope it helps.

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