As with most irrevocable trusts, the funds held in the Family Income Trust may be used after your death to buy assets from your taxable estate, or the Family Income Trust funds can be loaned to your estate to provide liquidity to pay the often oppressive estate taxes which are due within nine (9) months of death.
The trustee is also empowered to use the funds in the Family Income Trust as a family bank, both during your lifetime and after your death. The funds in the Family Income Trust can be distributed outright to your family members for their needs, or the trustee may loan the funds to them. Significant tax savings and creditor protection can be achieved through loans rather than through direct distributions.
The Family Income Trust can even own homes, boats, automobiles and family businesses as part of its assets. For example, if the Family Income Trust owned the home in which your son, his wife and their children reside, they would be allowed to live in the house rent free. They would be responsible for the daily expenses and upkeep. However, if your son was ever found liable in a lawsuit, the house would not be deemed one of his assets. Thus, his creditors would not be able to force the sale of the home. Your family would be protected. This same argument would carry through if your son and his wife were to divorce. Since he does not own the house, he cannot be ordered to give it to his wife.