A Guide to Understanding Trusts
Trusts have been touted as an excellent tool to avoid probate and estate taxes. This may be
true depending upon your circumstances; however, it is difficult to determine if a trust may be
right for you without a basic understanding of trust terminology. Listed below are some basic
trusts terms that will help you comprehend the subject.
Trust – is a legal relationship whereby a person or entity (such as a trust company or
bank) holds property for the benefit of himself or herself or some third person or group.
Trust property – the property placed in a trust can be any real or personal property
including but not limited to stocks, bonds, insurance proceeds, money, personal
possessions, vehicles, and business interests. Legal title to trust property is transferred.
This does not necessarily involve the movement of property from one place to another.
Grantor – is the person who creates the trust. Other terms used synonymously are
trustor or settlor.
Trustee – is the person or entity that holds and manages the property for the benefit of
the grantor or others designated by the grantor. The trustee holds legal title to trust
property and usually receives a fee for his or her services.
Beneficiary – is the person or persons who benefit from the trust. Beneficiaries hold
beneficial title or equitable title to trust property.
Trusts are complicated legal documents and should be tailored to fit the needs of the grantor.
Beware of self-help instruments designed to set up trusts, as they may not take care of all of
the legal requirements to set up the type of trust document you need. Consulting with an
attorney experienced in estate planning can be the difference between a trust that suits your
needs and a trust that fails.
Experienced estate planning attorneys Seattle WA of the Byrd Garrett PLLC offers estate
planning and business planning resources to residents of Seattle WA. To learn more about
these free resources, please visit www.byrdgarrett.com today.