What is a gifting trust?

A gift in trust is a special legal and fiduciary arrangement that allows for an indirect bequest of assets to a beneficiary. The purpose of a gift in trust is to avoid the tax on gifts that exceed the annual gift tax exclusion limit. This type of trust is commonly used to transfer wealth to the next generation.

What is an irrevocable gift trust?

An irrevocable gift trust (“IGT”) is an irrevocable trust which is specifically structured so that gifts to that trust will qualify as a gift of a present interest and, therefore, will not be treated as taxable gifts.

Why was the Child Trust Fund set up?

Child Trust Funds were set up by the Labour government to encourage parents to save for their children. The idea was for children to have some savings at the age of 18, to assist with costs such as further education funding or living alone for the first time.

Can a child be placed in a trust?

When creating trusts, parents are faced with tough decisions about how to leave their assets to their children. While each person needs to consider their own situation and unique children, there are a few general issues that everyone should consider. Assets of minor children should always be held in trust.

How old do you have to be to set up a trust?

Being 18 is not easy. In most states, the guardian has to turn over control of the assets to the children once they turn 18. When you are 18, an inheritance of $3 million seems like it will last a lifetime. And it can, if you are prudent and live frugally. But most 18-year-olds will use up the trust money on a lifestyle that they cannot afford.

Why are gifts made to a family gift trust?

Gifts are made to a Family Gift Trust (FGT) to obtain benefits not available if the property is given outright to a person. This is important for achieving goals such as asset protection planning, tax savings and equalization among family members.