What is a Trust?

A trust is a legal arrangement where property is managed by an appointed person for another person. The trust is created by a settlor, who then entrusts his or her property to people of his or her choice who are known as trustees. A legal title to the property is held by the trustees, but the trustees are obliged to hold the property for the benefit of one or more individuals known as the beneficiaries of the trust, who are specified by the settlor. A trust is typically in written form and created somewhat like a deed. A trustee must administer the trust following the terms of the trust and the governing trust law of the area. The settlor is also referred to as the grantor, trustor, donor, or creator.

Who should have a Trust?

If one or more of the situations listed below apply to you then you should consider creating a trust as part of your estate:

• 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

The following is a list of the types of trusts available today:

• Real Estate Investment Trusts
• Asset Protection Trusts
• Charitable Trusts
• Constructive Trust
• Express Trusts
• Implied Trusts
• Inter Vivos Trust
• Irrevocable Trust
• Revocable Living Trust
• Resulting Trust
• Special Needs Trust
• Spendthrift Trust
• Totten Trust

Setting up a Trust

A trust can be created during the lifetime of a person or upon their death by the instruction of the person’s will. A trust can be created by one or more of the following:

A written trust document, which is created by the trustor, signed by the trustor and the trustees

• An oral declaration
• The will of a decedent, which is called a testamentary trust
• A court order

Obtaining Legal Help

If you or a loved one is considering creating a trust, contact a trusts attorney immediately for expert legal counsel regarding your situation. An attorney will be able to help draft and write the trust, make sure that it follows the local trust law of your area, and will have the trust legalized.