trust

Note: Accumulation trusts are disfavored and often restricted in the law.

— called also common-law trust, Massachusetts trust

Note: A trust that qualifies as a business trust is eligible for bankruptcy protection under chapter 13 of the Bankruptcy Code.

— called also bypass shelter trust, credit shelter trust, shelter trust

Note: The purpose of a bypass trust is to reduce the surviving spouse's taxable estate. Such trusts do not qualify for the marital deduction.

Note: Charitable remainder trusts qualify for tax exemptions under section 664 of the Internal Revenue Code.

Note: Unlike most trusts, a charitable trust does not require definite beneficiaries and may exist in perpetuity.

Note: Prior to the Tax Reform Act of 1986, a Clifford trust could be used to divert income from the settlor, who was in a higher tax bracket, to a beneficiary, often a child, who was in a lower tax bracket. A settlor is currently treated as the owner of any portion of a trust in which he or she has a reversionary interest, and taxes are calculated at the settlor's rate.

Note: An honorary trust may be upheld where allowed by statute if its purpose (as for the care of an animal or grave) is sufficiently clear. An honorary trust is subject to the rule against perpetuities, however.

— called also living trust

— called also Illinois land trust, naked land trust

— called also dry trust, naked trust

Note: A power of appointment trust made in accordance with Internal Revenue Code section 2056(b)(5) qualifies for the marital deduction.

— called also bank account trust, savings bank trust, tentative trust

Note: The shareholders transferring legal title to their shares retain the equitable title and continue to receive dividends and other distributions. They also receive certificates as evidence of their interest in the trust, which provides the holder with the rights of a shareholder except for voting rights.