Common types of Trusts

Alaska is home to some of the most progressive trust laws in the country, allowing both residents and non-residents to benefit from a number of estate planning, tax savings, and creditor protection techniques not commonly available elsewhere. The following list briefly describes both those trusts falling within Alaska's Unique Benefits and some of those that are commonly used in any state, but is not exhaustive. Alaska USA Trust Company can serve as a trustee for almost any type of trust.

Revocable Living Trust: This is one of the most common and popular types of trusts. It's easy to administer and isn't required to file its own tax return. It enables you to retain control of your assets during your life, provide for your needs if you should become incapacitated, and avoid probate on your death (particularly if you own real property in more than one state). A properly-drafted revocable living trust is routinely used as the "foundation" of estate plans. It can be drafted to split into sub-trusts at your death, providing estate tax benefits, generation skipping transfer tax benefits, professional asset management and creditor protection for beneficiaries. Alternatively, it could be drafted to terminate at your death and pay out to various beneficiaries or charities.

Alaska Community Property Trust: This is a special type of revocable living trust that is unique to Alaska and which offers the income tax benefits of community property to married couples who live in non-community property states. Learn more

Alaska Asset Protection Trust: Alaska was the first state to authorize this type of trust which provides creditor protection to the grantor. Learn more

Alaska Dynasty Trust: Alaska is among a handful of states which permits trusts to continue for multiple generations thus enabling the trust assets to grow free of estate tax, gift tax, and generation skipping transfer tax. Learn more

Irrevocable Life Insurance Trust: This type of trust is designed to both own life insurance and be the beneficiary of the policy. If drafted and administered properly, the proceeds of the policy will be kept out of the grantor's taxable estate at death. (In contrast, the proceeds of a policy owned by a person will be included in the person's taxable estate upon death). Learn more

Charitable Remainder Trust: This type of trust enables a grantor to gift appreciated assets to charity while providing an income stream to the grantor and/or other family members.

Charitable Lead Trust: This type of trust provides a stream of income to a grantor's chosen charity. It may result in the transfer of assets to descendants at a greatly reduced gift and estate tax cost.

Qualified Personal Residence Trust: This trust can provide a mechanism for transferring a residence at reduced estate and gift tax cost. In Alaska, this trust also provides asset protection.

Credit Shelter or Bypass Trust: This type of trust is often contained within a Revocable Living Trust. It is used by a married couple to preserve the estate tax exemption amount of the first spouse to die.

QTIP Trust (Qualified Terminal Interest Trust): This trust is also used by married couples and is also often contained within a Revocable Living Trust. It provides income for life for the surviving spouse after the first spouse's death yet can be used, among other things, to provide for children of a first marriage.

Special Needs Trust: This type of trust is designed to provide "extras" for disabled loved ones without interfering with their ability to obtain government assistance.