A type of irrevocable inter vivos trust that was previously used to shelter.

• A. Charitable remainder annuity trust
• B. Qualified personal residence trust
• C. Testamentary trust
• D. Clifford trust

Answer: (D)

The main idea here is that some trusts were created specifically as tax-sheltering devices during life. A Clifford trust is one of those older irrevocable inter vivos structures that were used in the past to shelter wealth from transfer taxes. It’s distinguished from the other options because it’s the type that historically served as a tax-sheltering vehicle, whereas the charitable remainder trust is aimed at charitable giving and income for beneficiaries, the qualified personal residence trust is a still-used planning tool for reducing estate value through residence transfer, and a testamentary trust is created by a will rather than during life. So, the Clifford trust fits the description of an irrevocable inter vivos trust previously used to shelter.