What is a Trust?

Trust is a central part of all human relationships: family, business, politics, medical practices, and even romance. TRUST is a set of behaviors; it’s a feeling of confidence and security that someone cares. TRUST is the glue that holds everything together. Simply put, the word TRUST conjures strength and unity.

So, what IS a Trust? And who are the parties to a Trust?

• It’s a legal arrangement created during life or after death by an individual – the Grantor.
• The parties involved are a Trustee and beneficiary or beneficiaries.
• It holds property for the benefit of others or for a specific purpose.
  • Property can be money but not always.
• A Trustee has the power and a DUTY to perform.
• Beneficiaries are entitled to expect that the trustee will manage the trust property PRIMARILY for the benefit of the beneficiary (Fiduciary Duty).
• A trustee will follow the terms of the document: it’s a roadmap.
• A Trustee is RESPONSIBLE and ACCOUNTABLE for its actions.
• A Trust can be created during life, or it can be created upon death. It’s been said that you can’t take it with you, but the next best thing might be to be able to decide where it goes and for what purposes after you’ve died…that’s pretty powerful!

Each trust is as different as the individual creating it. Some reasons you may want a trust are:

• You can control your money after you die.                                                                         
• You can eliminate the tension and stress within the family.
• You can easily transfer money to others.

There are many different types of trusts that can be created. A few examples are listed below:

• A Living Trust is created during your lifetime for your use.
• A Testamentary Trust is created under the terms of your will.
• A Revocable Trust reserves the right to amend or revoke the trust or specific trust items. (A Living Trust is usually a Revocable Trust.) After you pass away, a revocable trust becomes irrevocable.
• An Irrevocable Trust does not allow you to change the trust or any of its terms after creation. (There could be tax advantages for creating this type of trust.)
• A Realty or Nominee Trust provides for a smooth transfer of real property to the intended beneficiary and can provide privacy.
• A Special Needs Trust can be created to set money aside for a disabled beneficiary who is receiving public assistance to cover most of their needs. Money in a special needs trust can be used to provide the disabled beneficiary with a better quality of life without reducing public assistance benefits.