Accounting Articles > Estates and Trusts:

What is a trust?

A trust is a living, breathing entity under the law which generally, holds title to an asset or group of assets.

The most difficult concept for most customers to understand is that you do not have to own an asset in order to control it or be able to profit from it.

Why is this important? From an estate planning perspective, if you don't own something, then it isn't part of your estate. If it isn't part of your estate, it isn't subject to estate taxes.

Let's use a simple example. If your estate is valued at $3,000,000, above the current estate tax credit, then currently your estate would owe roughly $1,650,000 in taxes nine months after you pass on. If we transfer that $3,000,000 into a trust, then the estate would probably owe no estate taxes at all.

If you are asking this question in the first place, then its probably time for a new accountant. Call our offices today. As highly recommended CPA's and Enrolled Agents providing tax and accounting services in the Chicagoland Area, we have the experience to help you and your company. This stuff isn't easy to do. Call or e-mail one of our specialists today.