united-states trusts-and-estates
One Trust paying out to another Trust
<p>If a person has setup a living revocable trust, can that person put a clause in the trust that upon death of the grantor the assets of the living revocable trust be paid out to a different trust that was setup before the person died? Is there any disadvantage in doing this? Do the two trusts have to have the same trustees?</p>

<blockquote>
<p>If a person has setup a living revocable trust, can that person put a
clause in the trust that upon death of the grantor the assets of the
living revocable trust be paid out to a different trust that was setup
before the person died?</p>
</blockquote>
<p>Yes.</p>
<blockquote>
<p>Is there any disadvantage in doing this?</p>
</blockquote>
<p>It costs more and is more trouble to have two trust instruments than it is to have one trust instrument, so you would only do this if there was a good separate reasons for setting up the second trust during life (e.g. to shield life insurance proceeds from gift and estate taxation, or in the case of a qualified domestic trust created for a non-citizen spouse to receive lifetime gifts).</p>
<blockquote>
<p>Do the two trusts have to have the same trustees?</p>
</blockquote>
<p>No. But you could also have separate trustees and different trust terms at different phases of a single revocable trust (before and after death, for example), which is the more common approach.</p>
