The use of trust funds began in the Middle Ages. As knights went off to battle, they wanted to preserve their wealth and provide for their dependants should they not make it back. Today, trusts are frequently recommended for a variety of good reasons – including protecting assets against creditors, minimizing taxes, and providing for [...]
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Disregarded Entities (LLC’s, Sub-S Corps, Grantor Trusts) and Discharged Indebtedness INTERESTING QUESTION Suppose a grantor trust or disregarded entity[i] becomes insolvent or bankrupt – but its owner is not. Is the owner exempt from income tax if the trust or entity is discharged from indebtedness? Some taxpayers take the position that the exception described below [...]
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A “living trust” is a revocable trust that is created for the purpose of managing the property affairs of the trustor(s). In its pure form it will contain all the assets of the trustor(s) and the trustee(s) during the life of the trustor(s) will be the trustor(s). In this context it takes the place of [...]
A revocable trust is any trust the may be revoked by the person or persons who have created the trust. Such persons are customarily referred to as the “grantor” or “trustor”, with the latter being the modern term. The typical revocable trust most often encountered is termed a “living trust”. For more information about living [...]
A trust is a separate and distinct entity. It has a legal status to the same extent as a corporation or a partnership. It can own assets, incur liabilities, engage in business and commercial transactions, make gifts of property, and is usually subject to taxation. In short a trust is fictitious person that has all [...]
