Chapter 16, Problem 1DC2

Summary Introduction

To determine:

Appropriate trust for a remarried couple C and N, change in type of trust when the spouse is having assets after the death of other spouse.

Introduction:

Trust is a legal entity that is created by a living person for transferring his assets for estate planning and after the death of the creator the assets are transferred to the beneficiary.

Irrevocable living trust is a method of estate planning where an individual can transfer his assets and once the transfer is done it is irrevocable and hence the owner loses his right over the assets so transferred to the trust.

Testamentary trust is a trust created by an alive person, known as grantor, in his lifetime for the benefit of his dependent and becomes active only after the dearth of the grantor.