Federal tax aspects of a revocable inter vivos trust agreement should be carefully studied in considering whether to create such a trust and in preparing the trust instrument. There are no tax savings in the use of a trust revocable by the trustor or a non-adverse party. The trust corpus will be includable in the trustor's gross estate for estate tax purposes. The income of the trust is taxable to the trustor.
A Vermont Revocable Trust Agreement with Husband and Wife as Trustees and Income to is a legal document that outlines the terms and conditions under which a couple transfers their assets into a trust for their benefit during their lifetime. This type of trust is revocable, meaning that the trustees (husband and wife) can amend or revoke the trust at any time as long as they are both alive and competent. With a Vermont Revocable Trust Agreement, the trustees have the ability to manage and control their assets while also providing for the management and distribution of those assets upon death or incapacity. This ensures that their wishes are carried out and that their loved ones are taken care of in accordance with their instructions. The agreement typically includes key provisions such as: 1. Identification of the Trustees: Clearly stating the full names and addresses of the husband and wife who are creating the trust. 2. Appointment of Trustees: Specifying the individuals or entities responsible for managing the trust assets. The trustees can appoint themselves as initial trustees and may also designate successor trustees to take over in the event of their incapacity or death. 3. Funding the Trust: Detailing the assets that the trustees will transfer into the trust, such as real estate, bank accounts, investments, and personal property. It is essential to properly fund the trust by re-titling assets into the name of the trust. 4. Distribution of Income: Outlining how the trust's income will be distributed during the lifetime of the trustees. The husband and wife may choose to receive all income, a predetermined percentage, or set up specific income beneficiary designations. 5. Distribution of Principal: Describing how the trust assets will be distributed to beneficiaries upon the death of the trustees. This can be designed to provide for the surviving spouse during their lifetime, and then transfer the remaining assets to children, grandchildren, charities, or other beneficiaries according to the trustees' wishes. 6. Incapacity Provisions: Addressing what happens if one or both trustees become incapacitated. This may involve naming a healthcare proxy or providing specific instructions regarding medical and financial decisions during incapacity. 7. Revocation and Amendment: Stipulating the conditions under which the trustees can amend or revoke the trust during their lifetime. Different types of Vermont Revocable Trust Agreements with Husband and Wife as Trustees and Income to may include: 1. Simple Revocable Trust: A basic trust agreement that primarily focuses on the transfer of assets and the subsequent distribution of income and principal. 2. Credit Shelter Trust: This type of trust, also known as a bypass or A-B trust, aims to minimize estate taxes by utilizing each spouse's federal or state estate tax exemption. 3. Qualified Terminable Interest Property (TIP) Trust: Designed to provide for a surviving spouse while also ensuring that the trust assets ultimately pass to beneficiaries chosen by the trustees, such as children from a previous marriage. 4. Revocable Life Insurance Trust (LT): A trust specifically established to hold life insurance policies, providing potentially significant estate tax benefits. Whether you are a young couple just starting out or a seasoned couple planning for the future, a Vermont Revocable Trust Agreement with Husband and Wife as Trustees and Income to can offer significant advantages in terms of asset management, probate avoidance, and providing for the financial well-being of your loved ones. It is recommended to consult with an experienced trust attorney to ensure that the trust agreement is tailored to your specific needs and complies with Vermont law.
