Legal Articles:
1. Understanding Wills
2. What is an Estate?
3. What is Probate?
4. Understanding Trusts

Wallace Legal News: Understanding Trusts?

*IMPORTANT: These materials are for informational purposes only. They should not be construed as legal advice. This information is not intended to replace the assistance of an attorney in any particular situation. It is not intended to, and does not, create an attorney-client relationship.

Understanding Trusts

Trusts allow people to transfer their property to other people, either during their lifetime or after death. Trusts also make it possible for people to make gifts but still exert some pre-arranged control over the gifts in the trust -- to truly give gifts with strings attached.

Trusts allow people to give what they have to whomever they want, when they want and in the way they want. Trusts can also be used to help reduce taxes, attorney fees and probate costs. Trusts can accomplish a wide range of estate planning objectives. Most attorneys will look at a whole assortment of trust instruments to meet the needs of their clients.

Think of a trust as an empty container into which you can place assets. A trust is created by a trust maker through the creation of a trust document.

The written trust document (or instrument) contains all the terms and provisions of the trust. It must contain a statement of purpose, as well as instructions issued by the trust maker about the details of the disposition of the trust property. A trustee is named to be in charge of carrying out the trust maker's instructions. The trust must also spell out the amount of control the trustee has to distribute funds and invade the principal (or main asset) of the trust, as well as any restrictions on distribution of the funds or their use. To be effective, all trusts must be in writing and signed by the trust maker. A single trust document can contain any number of separate trusts.

Trusts can be established to meet just about any objective you would like, as long as it doesn't break the law or go against public policy. Trusts can be created for the benefit of the trust maker and/or the benefit of others. People who receive the benefit are called beneficiaries, and there can be as many beneficiaries as you like. The beneficiaries who first benefit from the trust are called the primary beneficiaries. If the primary beneficiaries die or become disqualified according to the instructions given to the trustee, the property will then go to others, called the contingent beneficiaries.

If you'll like to learn more please visit our frequently asked questions section, or read rich's latest newsletter.