An express trust is a trust which has been created pursuant to the legal formalities of the jurisdiction where the trust is established. Generally, the express trust is reduced to a formal, legal document which complies to the law.
Requirements
The trust must meet certain basic requirements. First, the trust must indicate that the person creating the trust, also known as the settlor, intends to create the trust. Secondly, the trust must identify beneficiaries. Moreover, the trust must include property which funds the trust. This property is also known as the “res” of the trust.
Types of Express Trusts
- Charitable trust - which serves the benefit of a specific charitable purpose.
- Discretionary trust - allows a trustee to provide income to those people the trustee believes are entitled to it.
- Spendthrift trust - this is sometimes set up for individuals who are unable to manage the trust themselves, and is sometimes called an “asset protection trust.”
- Life interest trust - the income derived from the trust to a specific person for that person’s life.
These types of trusts are utilized for the benefit of disabled persons. The spendthrift trust is also used for protecting assets where there is Medicaid estate planning. Trusts are frequently sought where individuals do not want to subject their survivors to the probate process, which is the process by which a last will and testament is administered with court oversight. The use of a trust not only avoids probate, but also the trust minimizes the costs associated with probate of a will. Finally, trusts offer privacy, as the property contained in the trust and disposition to the trust beneficiaries is not a public record.
What do Express Trusts do?
Express trusts allow for the automatic passing of title to property upon the death of the person who set up the trust, also known as the “settlor.” The trust is frequently utilized in conjunction with a will which directs that any property not already contained in the trust be placed into the trust upon the settlor’s death. Express trusts are not appropriate for every estate plan; therefore, a consultation with an experienced estate planning attorney will ensure that your specific needs and interests are fulfilled by creating an estate plan which is tailored to your particular requirements.