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How are trusts created?

Trusts are a type of testamentary instrument that allows a grantor (the person who gives the stuff) to have some control over the disbursement and management of the assets. Trusts are separate legal entities, which means they can own property, sue, and be sued. Trusts are administered by Trustees, who are usually personal representatives appointed by the grantor, but many people also default to allow banks be their Trustee.

To create a trust, the grantor must transfer legal ownership of property to the trust. The “corpus” of the trust, i.e. the things it owns, enables the trust to exist. Once the corpus is gone (it can be sold off and given to the heirs), the trust no longer exists. The trust is usually formed via a will. For instance, many people like to use testamentary trusts and “pour over wills” which transfer all of a person’s assets to a trust on the moment of death. This combination of documents allows the grantor to continue to use the trust during life.

There are two general types of trusts: living and testamentary. A living trust exists while the grantor is alive. The grantor can control the trust and administer it for the benefit of the heirs. The trust exists so long as it is provided with a corpus. A testamentary trust comes into existence upon the death of the grantor. Testamentary trusts are usually part of a will, therefore, they must go through probate before the trust exist.

If you are engaged in litigation over a trust, you may want to contact an attorney. A lawyer can help you bring a suit against the formation of the trust, the trustee for breach of fiduciary duty, or any of the other innumerable issues that can come up with trusts. A lawyer can help you protect your rights and to ensure that your loved one’s wishes are respected by everyone.

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