What is a Trust?
A trust is a fictitious legal entity that owns assets for the benefit of a third person (beneficiary). The Grantor of the Trust is the person who set up and gave money to the Trust. The Trustee of the Trust is the person charged with keeping the assets safe, invested properly, and finally distributed to the Beneficiary at the proper time. The Grantor can pretty much decide how the money must be kept (in interest bearing accounts, in real estate, or only in government insured FDIC accounts, etc.), and when it may be distributed (when the beneficiary is 18 years old; or one half when the beneficiary turns 18 and the other one half when the beneficiary turns 21, etc.). The Grantor of the Trust can also be the Trustee of the Trust, if the Grantor decides to set the Trust up in such a manner (e.g., Grantor sets him/herself up to be the Trustee of a Trust for his/her child).
Other Trusts FAQs
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What is the QTIP trust?
QTIP trust stands for the qualified terminable interest property trust. It allows certain property to qualify for an estate and gift tax marital deduction even though … more -
What is a Totten Trust?
Setting up a Totten Trust is as simple as going to a bank and opening a Trust account by yourself. A Totten Trust is best for amounts of about $20,000 or less. Larger … more -
What is the difference between a Revocable Trust and an Irrevocable Trust?
A Revocable Trust is where the Grantor can change the terms of the Trust or even revoke the Trust altogether and take back all of the assets in the Trust. An … more -
What is an Abstract of Trust?
A condensed version of a Living Trust document, which leaves out details of what is in the Trust and the identity of the beneficiaries. An Abstract of Trust is … more -
What is an Accumulation Trust?
A trust in which the income is retained and not paid out to beneficiaries until certain conditions are met. For example, if you create a trust for your child`s … more
Estate Planning Sub-categories
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Estate Planning
Estate Taxes Guardianship Power of Attorney |
Probate
Trusts Wills Durable Power Of Attorney |
