Clifford Trust


Definition - What does Clifford Trust mean?

A Clifford trust is a short-term trust that lets a grantor put an income-generating asset in the name of a beneficiary for no more than ten years. The beneficiary is usually a minor. After the term of the trust, the asset is placed in the name of the grantor again.

Insuranceopedia explains Clifford Trust

The beneficiary of the Clifford trust is usually the child of the grantor. In the past, this trust was used to avoid paying large taxes because once assets are transferred to minors, the taxes become much lower. In 1986, Congress, recognizing the way this trust was being exploited to evade taxes, decided that throughout the term of the trust, the taxpayer must still be the grantor. Because of this congressional move, the Clifford trust is no longer as widely used as it was previously.

How Well Do You Know Your Life Insurance?

The more you know about life insurance, the better prepared you are to find the best coverage for you.

Whether you're just starting to look into life insurance coverage or you've carried a policy for years, there's always something to learn.

Share this:

Connect with us

Email Newsletter

Join thousands receiving the latest content and insights on the insurance industry.