Bloodline / descendants trust
Child is income/HEMS beneficiary; remainder passes only to grantor's descendants — excludes son- or daughter-in-law as beneficiaries. Protects family wealth from in-law divorce or creditors.
| Facet | Detail |
|---|---|
| Also called | Descendants trust, heirs-by-blood trust, anti-in-law trust |
| A-B / A-B-C role | None |
| When created | Testamentary or lifetime irrevocable |
| Revocable | No once irrevocable/testamentary funded |
| Inter vivos / testamentary | Either |
| Typical beneficiaries | Child for life; grandchildren/descendants as remainder |
| Primary purpose | Keep assets in bloodline |
| Marital deduction | No |
| Uses estate exclusion | If lifetime gift; or at death from estate |
| In survivor's estate | No |
| Basis step-up | At death if testamentary; carryover if lifetime gift |
| Income tax | Trust 1041 |
| Crummey powers | Sometimes if lifetime gifts to trust |
| GST / dynasty | Often combined with GST exemption |
| Spendthrift | Yes |
| See-through (IRA) | Possible with careful drafting |
| Key tradeoff | Bloodline protection vs in-law has no direct access (plan HEMS for household needs) |
See grandchildren-trust-primer.md.