What is the difference between a safe harbor trust and other trusts?
That is one of the basic fundamental things we discuss. A typical trust is a revocable living trust. One of the ways to plan your affairs is to use a revocable living trust. What this trust does is, it allows you to put away the assets you own from your name into the name of the trust, for the purposes of avoiding probate.
The second type of a trust is called a tax trust, or a credit shelter trust. This says that in any community property state, like Washington, between a married couple, the husband and wife will generally own 50% of the assets each. This type of trust basically says, that when the first spouse dies, instead of leaving the money down for the surviving spouse, their one half, or a portion of it, will go into the credit shelter trust, allowing avoidance of estate sales taxes. This is also a type of a safe harbor trust.
The safe harbor trust that I talk about is much like the credit shelter trust, but it has a different code, title 19. This basically follows the same husband and wife scheme. This money will no longer will be visible for programs such as Medicaid, VA, housing, and food.