Trusts can be very difficult & complicated
let a trust attorney consult you.
Trusts come in a variety of forms and can be established
in many different situations. Some common forms of Trusts
include:
(1) Asset Protection Trust - A type of Trust that is designed
to protect a person's assets from claims of future creditors,
frequently established in foreign countries.
(2) Charitable Trust - A Trust - and there are many different
types of charitable Trusts - established to benefit a particular
charity or the public. Typically charitable Trusts are established
as part of an estate plan to lower or avoid imposition of
Federal (and some states') estate and gift taxes.
(3) Constructive Trust - An implied Trust establish by
operation of law. While a person may take legal title to
property, equitable considerations require that the equitable
title of such property remain with others. Typically fraud
is a requirement for the establishment of a constructive
Trust, the person who took legal title to the property did
so as a result of a fraud brought upon the prior legal title
holder.
(4) Express Trusts - are those specifically created by
the grantor under a Trust agreement or declaration of Trust.
(5) Implied Trusts - arise from particular facts and circumstances
in which courts determine that although there was not any
formal declaration of a Trust, there was an intention on
the part of the property owner that the property be used
for a particular purpose or go to a particular person. For
example, if a neighbor asks you to take care of her car
for her when she is on vacation, and never returns, there
was an implied Trust, as she was not making you a gift of
the car.
(6) Inter Vivos Trust - A Trust that is created during
the lifetime of the grantor. A common type is a revocable
"living" Trust in which the grantor transfers
title to property to a Trust, serves as the initial Trustee,
and has the ability to remove the property from the Trust
during his/her lifetime.
(7) Irrevocable Trust - A Trust that cannot be altered,
changed, modified or revoked after its creation (absent
extreme extenuating circumstances). Once a grantor transfers
property to an irrevocable Trust, the grantor can no longer
take the property back from the Trust.
(8) "Living" Trust - A Trust created during the
lifetime of a grantor which can be altered, changed, modified
or revoked. Typically the grantor is the initial Trustee
as well as the initial beneficiary of the Trust, with his/her
spouse and children as the ultimate beneficiaries of the
Trust.
(9) Resulting Trust - A Trust that arises from, or is created
by operation of law, when the legal title to property is
transferred, but the beneficial interest is to be enjoyed
by someone other than the person who got the legal title.
(10) Special Needs Trust - A Trust that is established
for a person who receives government benefits so as not
to disqualify the beneficiary from such government benefits.
Ordinarily when a person is receiving government benefits,
an inheritance or receipt of a gift could reduce or eliminate
the person's eligibility for such benefits. By establishing
a Trust which provides for luxuries or other benefits which
otherwise could not be obtained by the beneficiary, the
beneficiary can obtain the benefits from the Trust without
defeating his/her eligibility for government benefits. Often
a Special Needs Trust includes a trigger which terminates
the Trust in the event that it could be used to make the
beneficiary ineligible for government benefits.
(11) Spendthrift Trust - A Trust that is established for
a beneficiary which does not allow the beneficiary to sell
or pledge away his or her interests in the Trust. A spendthrift
Trust is beyond the reach of the beneficiaries creditors,
until such time as the Trust property is distributed out
of the Trust and placed in the hands of the beneficiary.
(12) Tax By-Pass Trust - A type of Trust that is created
to allow one spouse to leave money to the other, while limiting
the amount of Federal Estate tax bite that would be payable
on the death of the second spouse.
(13) Testamentary Trust - A Trust that is included under
the terms and conditions established in a Will. Such Trusts
take effect after the death of the person making the Will.
(14) Totten Trust - A Trust that is created during the
lifetime of the grantor by depositing money into an account
at a financial institution in his or her name as the Trustee
for another. This is a type of revocable Trust in which
the gift is not completed until the grantor's death, or
an unequivocal act reflecting the gift during the grantor's
lifetime.
Many Trusts themselves establish "sub-Trusts".
For example, a revocable "living" Trust might
establish spendthrift Trust and a tax by-pass Trusts upon
the death of the first. Trusts can be structured to handle
a variety of situations but careful drafting is essential
to make the plan work.
