Category: Videos
What is a Trust?
What is a Trust?
A trust is one of the most common estate planning techniques available.
While there are many different variations of trusts, they all share the same basic structure.
The creator of the trust is called the grantor who signs an agreement with a trustee who agrees to hold assets in trust for the grantor’s chosen beneficiaries. Sometimes the grantor and the trustee are the actually the same person.
Think of the trust like a bucket.
The grantor creates a bucket and puts assets into it, such as bank accounts and a home.
The trustee’s job is to hold the bucket handle and the assets “in trust” for the beneficiaries named by the grantor.
The trustee administers the trust according to the rules laid out by the grantor including how and when to take assets out of the bucket and give them to the beneficiaries.
The benefits of trusts can include:
probate avoidance
flexibility
cost savings
tax planning
privacy; and
peace of mind
Watch for other videos where I describe specific types of trusts in more detail.
As always you can call us 801-765-0279 for a free consultation.
What is a NING Trust?
A NING Trust has HUGE potential for state income tax savings. Watch this video see how it works and to learn how you could save state income tax.
NING Trust stands for Nevada Incomplete-gift Non-Grantor Trust
Here’s how it works
The Settlor establishes an irrevocable trust in a state which has no state income tax such as Nevada.
Contributions to the trust have no gift tax consequences and the trust files and pays its own income taxes. When the trust earns income it pays federal income tax but because it is established in Nevada it pays no state income tax on undistributed income.
Here’s an example:
A Utah resident transferred stock in the company he founded to a NING Trust. Some time later, the NING Trust sold that stock for $5 million dollars. The trust paid federal income tax but saved the 5% Utah income tax because it is a Nevada resident and taxpayer. That’s a savings of $250,000. A California resident would have saved or deferred up to $665,000 based on California’s current top tax bracket 13.3%.
The IRS approved this in a private letter ruling in 2013 (20131002). It is crucial that a NING Trust is properly drafted so that it provides the desired benefits.
McCullough has years of experience preparing this type of trust and have seen numerous clients save or defer millions in state income taxes.
Call 801-765-0279 for a free consultation to see if a NING Trust works for you.
Asset Protection Trusts – Weakness Exposed
Asset Protection Trusts have weaknesses. The most commonly used asset protection trusts are self-settled offshore trusts and domestic asset protection trusts. Randy Sparks explains their weaknesses, and offers a better solution.
Best Asset Protection Trust NOT an Asset Protection Trust
Did you know that the best asset protection trust is NOT an asset protection trust at all. Watch this 2 minute video to learn more.