A Descendants Trust, also sometimes referred to as an Inheritance Protection Trust is a type of irrevocable trust that manages your children’s inheritance in trust rather than giving them outright distributions. This type of trust has many advantages, such as:
- If properly structured, the trust assets can be exempt from federal estate tax when the beneficiary passes.
- The trust assets are considered separate marital property and therefore are protected in the case of divorce.
- The trust assets are protected from creditors of the beneficiary.
- It is more likely that the assets stay within the family bloodline.
- You can direct management of the trust to be as restrictive or as flexible as you would like.
