Trusts 101: Part 1

Like most topics in the legal world, “trusts” is a large topic.  Different trusts are used in different situations to accomplish different objectives. But some general concepts apply to all types of trusts.

Part of my job as your estate planning attorney is making you comfortable with the way your estate plan works. I want you to know what all of the documents are, and what they do.  And I want you to be comfortable with the terminology. 

Trusts are almost always discussed, at least a little bit, in our first meeting.  Unless you have done an estate plan before, or perhaps have experience with someone else’s estate plan, trusts may be a foreign concept.  There are a zillion different types of trusts, and each one is different.  In estate planning, the most common trust is a living revocable trust.  

So, let’s see if we can shine some light on trusts.  First, some terminology:

Trust

• A trust is a legal entity that can control money and property that are for the use and enjoyment of someone else.  A trust is created by a written document that contains all of the rules of the trust.

Trustee

·       The Trustee has legal control over the trust assets.  They have a duty, called a fiduciary duty, to do what is in the best interests of the beneficiaries.

Grantor

·       The Grantor is the person who transfers property to the trust, usually the one who originally sets it up. They can also be called the Settlor.

Beneficiary

·       This is the person (or institution) who gets the use and enjoyment of the trust’s money and property