What Is A Legacy Trust?

What is a Legacy Trust? (Audio Transcript version)

I have to make an assumption that the Legacy Trust is another name for a type of Trust that is fairly ordinary, but somebody just happened to call it a Legacy Trust. I perceive that Trust is a kind of Trust where property goes into this Trust, you know, Trust is like a bucket it’s in this bucket and the persons who have established this bucket they’re the set laws; they own this property during their lifetime, they can do whatever they want, but when these set laws die The Inheritance instructions in that Trust document says something to the effect of this property shall stay in Trust for the rest of our children’s lives and during our children’s lives here are the rules that apply to this Trust, sometimes it’ll say that the property can’t be sold sometimes it’ll tell if it is sold it must; it must be used to purchase another property, and while the property is still intact, and in this Trust it can, it can be rented out, and the rent will go to the children in equal shares, or it will say, it can provide to be a principal residence of one of our kids or most of our kids, and we have rules about who can live there and at what time and should they pay rent, so you have these you have this property in this Trust that’s got all of the instructions that by which the Trust has to be administered and held, and distributed that the property is and then it says okay when the last of our children die well, now what well this if the if the persons who set up this Trust say we want this property to be the pyramid to future Generations will see that the property may still be considered untouchable while it’s in the hands of the grandchildren, so now I mean the grandchildren can’t sell it or the grandchildren can charge rent for whatever now these rules and regulations and do’s and don’ts apply to the grandchildren, that could be in the form of a generation-skipping Trust, it could be in the form of this Legacy Trust or what have you but I think that’s probably what do you think does that kind of sounds like what you’re understanding what that Legacy Trust is and they could almost generation skip, that was one thing he said that the other thing was that there was some tax benefit to using this specific Trust versus just a regular so that way the IRS less money, the tax benefit would be that if this was a generation-skipping Trust that had all the required bells and whistles that the IRS requires to exist for it to be considered a generation-skipping Trust the benefit of that is so that when the property goes from so here, mom and dad die and the property stays it goes in the generation-skipping Trust the children of mom and dad are the beneficiaries so when those children die and that property or the sale proceeds they’re from, or whatever in that generation is giving Trust will go to their kids with no estate tax, okay, no the estate tax, so you know my dad used to say there’s no second bite of the tax Apple because maybe there will be an estate tax after Mom and Dad are dead when the property goes to the generation-skipping Trust well the purpose of that is to avoid that second by the tax apple on the same property when the property goes from those deceased children to their children that I think that’s maybe what, uh okay you’re referring to.