What is the purpose of a lifetime trust?

• A. To protect loved ones and their inheritance from ruinous decisions and creditors.
• B. To minimize all taxes.
• C. To expedite probate.
• D. To create perpetual charitable distributions.

Answer: (A)

A lifetime trust is built to safeguard a beneficiary’s assets for their lifetime by having a trustee manage and control how those assets are used. The core idea is to help prevent wasteful spending and to shield the inheritance from creditors or risky decisions the beneficiary might make, while still providing the beneficiary with support through scheduled distributions or income as the trust directs.

This structure often includes spendthrift protections, meaning creditors generally can’t reach the trust assets to satisfy debts, at least while the assets remain in the trust and distributions haven’t been made. After the beneficiary’s lifetime, the remaining assets can pass to other named beneficiaries or charities, depending on the trust terms.

While trusts can have tax planning aspects, they aren’t primarily about minimizing all taxes. They also don’t aim to speed up probate—trusts are typically used to avoid probate for assets placed into the trust—and they aren’t inherently about perpetual charitable distributions unless it’s specifically drafted as a charitable or hybrid arrangement.