Trusts

A trust is defined as a legal arrangement where property is managed by an appointed person for another person. The person who creates the trust is known as the settlor. The settlor then entrusts his or her property to people of his or her choice. The people chosen by the settlor are known as the trustees. The trustees must hold a legal title to the property of the trust and are obliged to do so for the benefit of one or more individuals known as beneficiaries of the trust. The beneficiaries of a trust are specified by the settlor. A trust must be in writing, it is administered by the trustees, who follow the directions of the trust and the governing trust law of that area. The settlor is also known as the grantor, donor, creator, or trustor.

Who Needs a Trust?

If you fit into one or more of the situations listed below then you need a trust:

• You want to avoid probate
• You want to provide for minor children
• You want to provide for someone who cannot manage money
• You want to avoid paying federal estate taxes
• You want to contribute to a charity
• You want to distribute real property
• You want to keep property separate
• You want to provide for yourself and your care if you become ill
• You want to maintain privacy
• You want to decrease the chance of a legal challenge to the way you want to distribute your property

Types of Trusts Used Today

The following is a list of trusts used today in legal settings:

• Constructive
• Express
• Fixed
• Hybrid
• Implied
• Incentive
• Inter Vivos
• Irrevocable
• Offshore
• Private
• Public
• Protective
• Purpose
• Resulting
• Revocable
• Secret
• Simple
• Special
• Spendthrift
• Standby or Pourover
• Testamentary or Will Trust
• Unit Trust

How to Setup a Trust

Trusts can be created during the lifetime of anyone wishing to create a trust or following their death. A trust is created following one’s death because of the instructions of that person’s will. Trusts are created via the following:

• A written document, which is signed by the trustor and trustees after it is created by the trustor
• An oral declaration
• A Testamentary Trust, which is ordered by the will of a decedent
• A court order

Obtaining Legal Help

If you or a loved one is considering creating a trust, contact an experienced wills and inheritance attorney immediately for expert legal counsel regarding your situation. An attorney will help you draft the trust, legalize the trust, answer your trust questions, and make sure that the trust follows the trust laws of the area.