Trust - Basic Concepts, Private Trusts, Creation Of Express Trusts, Methods Of Creation, Protection Of Beneficiary's Interest From Creditors
property created individual law
A relationship created at the direction of an individual, in which one or more persons hold the individual's property subject to certain duties to use and protect it for the benefit of others.
Individuals may control the distribution of their property during their lives or after their deaths through the use of a trust. There are many types of trusts and many purposes for their creation. A trust may be created for the financial benefit of the person creating the trust, a surviving spouse or minor children, or a charitable purpose. Though a variety of trusts are permitted by law, trust arrangements that are attempts to evade creditors or lawful responsibilities will be declared void by the courts.
The law of trusts is voluminous and often complicated, but generally it is concerned with whether a trust has been created, whether it is a public or private trust, whether it is legal, and whether the trustee has lawfully managed the trust and trust property.
Additional Topics
The person who creates the trust is the settlor. The person who holds the property for another's benefit is the trustee. The person who is benefited by the trust is the beneficiary, or cestui que trust. The property that comprises the trust is the trust res, corpus, principal, or subject matter. For example, a parent signs over certain stock to a bank to manage for a child, with instruction…
An express trust is created when the settlor expresses an intention either orally or in writing to establish the trust and complies with the required formalities. An express trust is what people usually mean when they refer to a trust. Every private trust consists of four distinct elements: an intention of the settlor to create the trust, a res or subject matter, a trustee, and a beneficiary. Unle…
A trust may be created by an express declaration of trust, a transfer in trust made either during a settlor's lifetime or under her will, an exercise of the power of appointment, a contractual arrangement, or statute. The method used for creating the trust depends on the relationship of the settlor to the property interest that is to constitute the trust property. Declaration of Trust A tru…
Various trust devices have been developed to protect a beneficiary's interest from creditors. The most common are spendthrift trusts, discretionary trusts, and support trusts. Such devices safeguard the trust property while the trustee retains it. Once funds have been paid to the beneficiary, however, any attempt at imposing restraint on the transferability of his interest is invalid. The m…
To be valid, a charitable trust must meet certain requirements. The settlor must have the intent to create a charitable trust, there must be a trustee to administer the trust, which consists of some trust property, and the charitable purpose must be expressly designated. The beneficiary must be a definite segment of the community composed of indefinite persons. Selected persons within the class mu…
The terms of a trust instrument, when a writing is required, or the statements of a settlor, when she creates a trust, set specific powers or duties that the trustee has in administering the trust property. These express powers, which are unequivocal and directly granted to the trustee, frequently consist of the power to sell the original trust property, invest the proceeds of any property sold, a…
The period of time for which a trust is to operate is usually expressly prescribed in the trust instrument. A settlor can state that the trust shall last until the beneficiary reaches a particular age or until the beneficiary marries. When this period expires, the trust ends. When the duration of a trust is not expressly fixed, the basic rule is that a trust will last no longer than necessary for …
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