A gift in trust is an indirect bequest of assets to a beneficiary by means of a special legal and fiduciary arrangement. The purpose of a gift in trust is to avoid taxes on gifts that exceed the annual gift tax exclusion amount. Gift givers almost always pay gift taxes if gifts exceed $13,000 in one year. Gifts in trust are commonly used by parents or grandparents who wish to establish a trust fund for their children or grandchildren.
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