Trust Law
“Trust law” refers to a legal arrangement by which a person or entity, known as a trustee, administers assets on behalf of another person or entity, known as a beneficiary. The trustee is responsible for managing the assets and acting in the best interests of the beneficiary. Depending on the circumstances, trust law can involve complex tax and investment considerations, and an attorney may be necessary to help establish and manage a trust.
Trusts can be established for various purposes, including providing for children in the case of the death of a parent, holding and managing property, creating endowments for charities, or preserving assets for future generations. Generally speaking, there are four types of trusts: a Living Trust, a Charitable Trust, an Irrevocable Trust, and a Revocable Trust. Each type of trust has different rules and regulations that must be followed in order for it to be legally valid.
A Living Trust is a type of trust that allows the settler (the person setting up the trust) to transfer assets to someone else called a trustee. The trustee then manages the assets in the trust, according to instructions and regulations set forth by the settler. Generally speaking, Living Trusts do not require any special taxing considerations or disclosures, and the settler typically maintains control over the trust and can make changes to the trust during his or her lifetime. Upon the settlers death, the trust is then administered to pass the assets to the beneficiary.
A Charitable Trust is another form of trust that is used to benefit a specific charity or charitable cause. Charitable Trusts allow donors to transfer money or other assets to the charity and receive tax benefits for doing so. The money or assets are then managed by the Trustee and held for the benefit of the charity.
An Irrevocable Trust is a trust that cannot be changed or amended once it is created. It grants the trustee control over the assets it manages, and those assets cannot be changed in any way without the trustees approval. It can provide financial security to beneficiaries over whom the settler has no control.
Lastly, a Revocable Trust is a trust in which the settlor can make changes to the terms at any time during his or her lifetime. This allows the settlor to be flexible in how the assets are managed and distributed, and it also provides a level of protection against creditors since the settlor cannot access the assets in the trust.
In general, trust law can be a complex and intricate field of law. It is important to consult with an experienced attorney before considering how to handle the transfer of assets to a trust. An experienced attorney will be able to provide advice on which type of trust is best suited to the particular situation, and advise on any relevant tax or investment considerations.
