VIEWS: 25 PAGES: 1 POSTED ON: 2/21/2011
There are many types of trusts and many purposes for their creation. Some of the more commonly known are asset protection trusts, charitable and charitable remainder trusts, constructive trusts, dynasty trusts, revocable and irrevocable trusts, life insurance trusts, living trusts and testamentary trusts, just to name a few. Estate planning involves the use of a trust for the management and distribution of assets during a person's life or after their death. A trust may be created for a surviving spouse, children, friends, business, charitable organization or for the financial benefit of the person creating the trust. Trust law is voluminous, but generally concerns whether a trust has been lawfully created, if it is public or private and if a disinterested third-party trustee held the assets of the trust. A trust is comprised of four separate and distinct parts: 1. A settlor is the person who created the trust. A settlor determines the terms and conditions whereupon assets are to be inherited or disbursed. 2. A trustee is the person who holds and disburses the assets of the trust. A trustee may be an individual or an entity. A trustee has a fiduciary responsibility to act in good faith and administer the terms and conditions of the trust agreement in accordance with general trust law principles. 3. A beneficiary is the person who is benefited by the trust. 4. A trust is the formal written agreement and assets that comprise the trust (corpus). A trust becomes active, or activated, once it has been funded with assets. The doctrine of merger states that in the event a person is both the sole trustee and beneficiary of a trust, there is a fusing of legal and equitable title and the trust is terminated. Arms length regulations require a disinterested third-party act as the trustee to avoid such a merger. Therefore it is prudent to consider the services of a reputable attorney, bank or company to provide trustee services. To learn more about how to avoid probate by taking advantage of living trusts in your family’s estate planning, be sure to contact the author. Author Info: Jones Smith is an asset protection specialist for an International Business Company in the Republic of Seychelles. Visit their website for more details and free consultations on how to integrate living trusts in your estate planning.
"Fundamentals of Trusts in Estate Planning "