What is a Trust?
A trust is a right in property held by one person for the benefit of another. Trusts serve a variety of purposes and may take several different forms. A trust may be created to benefit a family member, a charity, or even a pet. Since trusts allow an individual to distribute his or her assets to others while minimizing estate, income, and gift taxes, trusts have become an essential component of estate planning. In the absence of nationally uniform trust legislation, individual states have developed their own laws to govern the establishment and maintenance of trusts. The Uniform Probate Code (UPC), which sets forth provisions relating to both wills and trusts, has been adopted in whole by over 30 percent of the states.
How Do I Create an Express Trust?
Express trusts are created by a settlor, who transfers property to a trustee for a valid trust purpose.
The trustee then distributes the trust property to a beneficiary pursuant to the terms of the trust.
The following definitions elaborate on the essential components of an express trust:
A trust is a right in property held by one person for the benefit of another. Trusts serve a variety of purposes and may take several different forms. A trust may be created to benefit a family member, a charity, or even a pet. Since trusts allow an individual to distribute his or her assets to others while minimizing estate, income, and gift taxes, trusts have become an essential component of estate planning. In the absence of nationally uniform trust legislation, individual states have developed their own laws to govern the establishment and maintenance of trusts. The Uniform Probate Code (UPC), which sets forth provisions relating to both wills and trusts, has been adopted in whole by over 30 percent of the states.
How Do I Create an Express Trust?
Express trusts are created by a settlor, who transfers property to a trustee for a valid trust purpose.
The trustee then distributes the trust property to a beneficiary pursuant to the terms of the trust.
The following definitions elaborate on the essential components of an express trust:
- The Settlor. The settlor, also known as the grantor or trustor, is the person who creates the trust and transfers trust property.
- Trust Property. Any type of property, real or personal, tangible or intangible, may serve as trust property.
- The Trustee. A trustee maintains the trust property and makes distributions to the beneficiary according to the terms of the trust. A trustee may be a person or a legal entity. The trustee owes a fiduciary duty to the beneficiary, which includes protecting trust property, investing prudently, and making proper distributions.
- The Beneficiary. The beneficiary to a trust is the person who benefits from the trust property. A beneficiary may be a single person, a group of people, an organization, or a pet. The beneficiary need not be in existence at the time the trust is created.
- Trust Purpose. A trust must have a valid purpose. A valid purpose is defined as any legal purpose. Trusts are most commonly created to provide for support, education, asset protection, tax planning or to contribute to a charity.
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