Permanent trusts are designed for the prolonged management of permanently and irrevocably transferred assets. The objectives of this type of trust include:
Immediate removal of the transferred property from the settlor’s (the person who sets up the trust) estate for estate tax purposes, often accomplished at the cost of making a gift for gift tax purposes.Elimination of income generated by trust assets from the settlor’s income for income tax purposes. Trusts for minors and life insurance trusts, which I will discuss further below, are specialized forms of permanent trusts.