| A beneficiary trust is an organization or a concept | | | | The beneficiaries of a trust can be of two types; fixed |
| which provides wealth preservation, asset protection | | | | beneficiaries or discretionary beneficiaries. Fixed |
| and dynasty trust, all in one package. It offers | | | | beneficiaries are the ones who have a straightforward |
| protection from estate taxes, divorcing expenditures | | | | and fixed right over the income and the capital. On the |
| and creditors and becomes irretrievable upon funding. | | | | other hand, discretionary beneficiaries are the ones on |
| Beneficiary is any person who is permitted to the | | | | whom the trustees must take a verdict as to the |
| benefit of any trust arrangement. A beneficiary can be | | | | relevant prerogatives. Beneficiaries of a trust should be |
| a person, or even a firm or a company. It is someone | | | | differentiated sequentially, based on the ones with |
| who enjoys the benefits of your Trust assets. It may | | | | vested interests such as the tenants for life, and those |
| be your wife, children, grand children or charitable | | | | with contingent interests which include remainder men. |
| organizations. Generally, there are no restrictions on | | | | They are also to be distinguished on the basis of bare |
| who may be a beneficiary. A beneficiary may be a | | | | trust and express trust. |
| minor, an unborn children or people under mental | | | | There is no limit on the number of pages for the Trust |
| disability. | | | | document. It is wiser to make it as simple as possible, |
| A beneficiary may be for an unlimited amount of time | | | | as the more complicated you make it, the more |
| period. A beneficiary may include the original granter, | | | | complicated it is to administer. Trust assets include |
| but that would be self-defeating, as in that case, he will | | | | your personal residence, your investment account, |
| have to carry the burden that he was trying to get rid | | | | other real estate or your business, limited only by your |
| of. The basic reasons for beneficiary trust are, gaining | | | | valuable assets that you wish to contribute to your |
| asset protection, removal of probate, exclusion of | | | | trust. It obtains its own federal ID and files a tax return. |
| estate taxes and gaining certain unusual tax | | | | Distributions to beneficiaries may or may not be |
| advantages. Any kind of control by the granter will turn | | | | rateable depending on the nature of the fundamental |
| the trust revocable and subject to court discretion. | | | | assets. |
| The trust is used for transfer tax purposes, which | | | | Although a trust may be a business, but since it is a |
| means that the property is owned by the trust and is | | | | private contract between the granter, the trustee and |
| not includible in the estate of the transferor. So, one | | | | the beneficiaries, it may be difficult for others to do |
| can say that it is an intentionally defective granter trust. | | | | business with you. In order to proceed in that, the other |
| Although for income tax purposes, the trust is a | | | | party may be interested in having their attorney look at |
| granter trust, and the granter is treated as the owner | | | | your Trust agreement. |
| for income tax purposes. | | | | |