Trusts
There are currently 15 modeling options available in the US Voyant software.
Types of Trusts:
Definition: A trust where the grantor retains control and can revoke or amend at any time.
When to Use: Common for probate avoidance and asset management during incapacity.
Voyant Modeling: Assets remain in the estate; show as taxable and available for spending. No estate tax benefit.
Definition: A trust that removes appreciating assets from the estate but is still taxed to the grantor.
When to Use: Advanced estate freeze strategy for high-net-worth clients.
Voyant Modeling: Show gifting of assets into trust, exclude future growth from estate, and simulate income tax paid by grantor.
Definition: Cannot be altered once established. Assets are outside of the grantor's estate.
When to Use: Basic gifting or legacy planning.
Voyant Modeling: Gift assets into trust and remove from estate. No ongoing control or income taxation to the grantor.
Definition: Irrevocable trust that provides access to income/benefits for the spouse.
When to Use: Preserve estate tax exemption while retaining indirect access to assets.
Voyant Modeling: Gift to trust; show reduced estate and simulate distributions to spouse.
- Spousal Lifetime Access Non-Grantor Trust
Definition: SLAT variation where the trust pays its own taxes instead of the grantor.
When to Use: Used when minimizing grantor income tax burden.
Voyant Modeling: Model trust income/expenses separately, reduce estate value, and assign taxes to the trust.
- Spendthrift Trust
Definition: Protects trust assets from beneficiaries' creditors and poor spending habits.
When to Use: For beneficiaries who may mismanage wealth or have legal exposure.
Voyant Modeling: Use trust beneficiary planning with controlled distributions.
- Asset Protection Trust
Definition: Irrevocable trust designed to shield assets from future creditors.
When to Use: For physicians, business owners, or anyone with lawsuit risk.
Voyant Modeling: Exclude from estate, show limited access/distribution options.
- Qualified Terminable Interest Property (QTIP) Trust
Definition: Allows income to surviving spouse and defers estate tax until second death.
When to Use: For blended families or when controlling ultimate asset distribution.
Voyant Modeling: Spouse receives income; remainder goes to other beneficiaries. Use for estate tax delay.
- Irrevocable Living Trust
Definition: Funded during the grantor's lifetime and cannot be changed.
When to Use: Often overlaps with ILIT or SLAT, depending on structure.
Voyant Modeling: Transfer assets, model as removed from the estate.
- Minor's Trust
Definition: Holds assets for minors until they reach a specified age.
When to Use: Used in gifting strategies, especially for UGMA/UTMA alternatives.
Voyant Modeling: Track restricted access; assume distributions post-age threshold.
- Credit Shelter Trust (Bypass Trust)
Definition: Sheltering deceased spouse's exemption to avoid estate tax at second death.
When to Use: Married couples with taxable estates.
Voyant Modeling: Show split of estate into survivor and credit shelter trust. Renders unified credit modeling.
- Qualified Domestic Trust (QDOT)
Definition: Provides marital deduction when the surviving spouse is not a U.S. citizen.
When to Use: Estate planning for international couples.
Voyant Modeling: Defer estate tax, simulate qualified distributions with tax deferral noted.
Definition: A CRAT is an irrevocable trust that pays a fixed annual amount to one or more non-charitable beneficiaries for a specified period or for life. After the term ends, the remaining assets go to a designated charity.
Definition: A CRUT is an irrevocable trust that pays a variable annual amount, calculated as a fixed percentage of the trust’s annually revalued assets, to one or more non-charitable beneficiaries. At the end of the trust term, the remaining assets are distributed to a designated charity.
Definition: A GRAT is an irrevocable trust used in the U.S. to transfer wealth to beneficiaries with minimal gift tax. The grantor places assets in the trust and receives an annuity payment for a set number of years. After that term, any remaining assets pass to the beneficiaries tax-free, assuming the assets outperform a set IRS interest rate (the §7520 rate). It's a common tool for estate tax reduction and wealth transfer.