|
The term trust describes the holding of property by a trustee (which
may be one or more persons or a corporate trust company or bank) in
accordance with the provisions of a written trust instrument for the
benefit of one or more persons called beneficiaries. A person may be
both a trustee and a beneficiary of the same trust. A trust created
by your will is called a testamentary trust and the trust provisions
are contained in your will.
If you
create a trust during your lifetime, you are described as the
trust's grantor or settlor, the trust is called a living or inter
vivos trust, and the trust provisions are contained in the trust
agreement or declaration. The provisions of that trust document
(rather than your will or state law defaults) will usually determine
what happens to the property in the trust upon your death.
A
living trust may be revocable (subject to change and terminated by
the settlor) or irrevocable. Either type of trust may be designed to
accomplish the purposes of property management, assistance to the
settlor in the event of physical or mental incapacity, and
disposition of property after the death of the settlor of the trust.
Trusts
are not only for the wealthy. Many young parents with limited assets
choose to create trusts either during life or in their wills for the
benefit of their children in case both parents die before all their
children have reached an age deemed by them to indicate sufficient
maturity to handle property. This permits the trust estate to be
held as a single undivided fund to be used for the support and
education of minor children according to their respective needs,
with eventual division of the trust among the children when the
youngest has reached a specified age. This type of arrangement has
an obvious advantage over an inflexible division of property among
children of different ages without regard to their level of maturity
or individual needs at the time of such distribution.
|
Software
