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The concept of a trust was first used in anglo saxon times and is a contractual arrangement whereby property is transferred from one person the grantor to another person or corporate body the trustee to hold the property for the benefit of a specified list or class of persons the beneficiaries. A grantor trust is a trust in which the grantor or some other person retains control over the trust to such an extent that the grantor or such other person rather than the fiduciary or beneficiary is treated for federal income tax purposes as the owner of all or part of the trust and is therefore taxed directly on the income and or other tax attributes of the trust.

Free Printable College Education Trust Form Generic Education

The grantor trust is often called a living trust or a revocable trust.

What is a grantor of a trust. Grantors trust rules are rules applied to different types of trusts. All grantor trusts are revocable living trusts while the grantor is alive. The grantor is sometimes also called the trustor or the settlor.

Grantor trusts can provide wealth preservation by giving the assets within the trust certain asset protection keeping these assets out of the grantor s estate and alleviating the burden of tax from the trust assets and the. The type of trust you re administering determines whether you must file form 1041 for the trust or declare all items of income and deduction on the grantor s form 1040. Instead the trust owns the assets.

One type of grantor trust that is useful in estate planning is a grantor trust. To summarize a grantor trust much like any tax strategy has its benefits and pitfalls and vary from case to case. Generally a grantor of an irrevocable trust gives up control over trust assets and no longer owns these assets.

Protect your assets and avoid probate with a living trust. Grantor trusts and non grantor trusts are the two main types of funded trusts trusts that hold assets. This individual can be different from other titles you ll see sprinkled throughout the trust agreement and this is where things can get a bit confusing.

A grantor trust is a trust in which the individual who creates the trust is owner of the assets and property for income and estate tax purposes. Because the trust is revocable i e can be changed or terminated until the grantor dies the grantor can change any part of the trust as often as he or she likes. The terms grantor settlor trustmaker and trustor all mean the same thing for estate planning purposes.

This trust allows the grantor the individual who establishes the trust to have control over the trust assets and receive income that is created from the trust. However there are some exceptions to this general rule. In some cases a trust can be treated as a grantor trust when a third person nonadverse to the grantor.

In simple terms a grantor trust is a trust in which the grantor the creator of the trust retains one or more powers over the trust and because of this the trust s income is taxable to the grantor. All refer to the person who creates a trust.