>That is, Trusts are only useful and good for sheltering assets because only a privileged few know how to use them to their advantage. Since the volume of people is small, and enough of those people are sufficiently influential, the IRS looks the other way.
I think this is maybe a little misleading (at least to those who don't know much about them) because trusts generally don't really shelter income from the IRS. For the most part, they just change timing. Trusts, in fact, can actually be subject to higher tax rates than most individuals are. As I understand it, the tax benefit usually comes from giving money now and not having to worry about gift or estate taxes on a higher future valuation, only the current valuation.
Trusts are good for anyone who wants to avoid probate costs, which depending on location can be 5% or more (in addition to the other disadvantages of probate). Many middle to upper middle class families would fall into a situation where a simple trust could save their children tens of thousands of dollars in probate court costs.
There are also a number other situations where the non-"privileged few" can and do benefit from trusts, including the one that this seems to be set up to handle -- gifting money to a child or grandchild for their future, without giving them immediate access to it.
I think this is maybe a little misleading (at least to those who don't know much about them) because trusts generally don't really shelter income from the IRS. For the most part, they just change timing. Trusts, in fact, can actually be subject to higher tax rates than most individuals are. As I understand it, the tax benefit usually comes from giving money now and not having to worry about gift or estate taxes on a higher future valuation, only the current valuation.
Trusts are good for anyone who wants to avoid probate costs, which depending on location can be 5% or more (in addition to the other disadvantages of probate). Many middle to upper middle class families would fall into a situation where a simple trust could save their children tens of thousands of dollars in probate court costs.
There are also a number other situations where the non-"privileged few" can and do benefit from trusts, including the one that this seems to be set up to handle -- gifting money to a child or grandchild for their future, without giving them immediate access to it.