Direct Answer
Overview of trust, estate and charitable account types used in investment planning: revocable living trusts, irrevocable trusts.
Trust, Estate & Charitable Account Profiles
Trust, estate and charitable accounts are used to hold and manage investments in the context of estate planning, wealth transfer and charitable giving. These account types involve significant legal, tax and planning considerations that vary by state. Consult a licensed attorney and financial planner before establishing any trust or estate structure. These pages do not provide personalized legal or investment advice.
Trust Account Types
- Revocable Living Trust (Grantor Trust), a trust the grantor can amend or revoke during their lifetime; assets pass outside probate at death; no tax advantage during grantor's life (taxed as grantor's income); commonly used to hold brokerage and investment accounts for estate-planning purposes. Detailed profiles coming to this section.
- Irrevocable Trust, a trust that generally cannot be modified after creation; removes assets from the grantor's taxable estate; used for asset protection, Medicaid planning and life insurance trusts (ILITs); trust files its own Form 1041. Detailed profiles coming to this section.
- Testamentary Trust, a trust created by a will that takes effect at death; subject to probate; often used to hold assets for minor beneficiaries until a specified age. Detailed profiles coming to this section.
Estate Accounts
- Estate Account, a temporary bank or brokerage account opened in the name of a deceased person's estate by the executor; holds estate assets during probate; used to pay debts and distribute remaining assets to beneficiaries; closed once the estate is settled. Detailed profiles coming to this section.
Charitable Accounts
- Donor-Advised Fund (DAF), a charitable giving account sponsored by a 501(c)(3) public charity; donor contributes assets (cash, securities, real estate) and receives an immediate charitable deduction; the sponsoring organization holds the assets; donor recommends grants to qualified charities over time; assets grow tax-free inside the fund. Detailed profiles coming to this section.
- Charitable Remainder Trust (CRT), an irrevocable split-interest trust; donor transfers assets to the trust, receives an income stream for a specified term or life, and the remainder passes to a qualified charity; partial charitable deduction at time of transfer. Detailed profiles coming to this section.
- Charitable Lead Trust (CLT), income stream passes to a qualified charity for a term, then remainder to non-charitable beneficiaries (family); used for wealth transfer while satisfying a charitable interest; partial gift or estate tax deduction. Detailed profiles coming to this section.
Related Resources
- Investment Account Profiles Hub, all account categories.
- Investment Account Types Overview, tax-advantaged vs. taxable account comparisons.
- Taxes & Rules Hub, gift tax, estate tax, and transfer tax rules.