WHAT IS A TRUST?
Many individuals want to make sure their property and assets end up in the right hands after their death. One way to make sure such a desire is realized is by setting up a trust. A trust is a document that lays out an agreement whereby property is held or taken care of by one party or individual for the benefit of and eventual transfer to another party or individual. There two kinds of trusts: a testamentary trust and a living trust. These entities are very similar—the main difference is that a testamentary trust is officially established upon the grantor’s death while a living trust is established during their lifetime. Most people who decide to go with a trust instead of a will do so to avoid probate issues. Setting up a trust can also help to reduce estate tax liability as well as protect your property.
Components of a Trust
Anyone who is looking to set up a trust should be aware of the different components of what makes up such an arrangement. The first component is, of course, the person who is actually setting up the trust. This individual is called the grantor or trustor. The second is the objective of the agreement. The goal of the trust will help to determine the specific kind of trust that should be set up. Some of the different types include a credit shelter trust, generation-skipping trust, qualified personal residence trust, irrevocable life insurance trust, and qualified terminable interest property trust. Though each form carries different benefits and risks, ultimately having different types available allows people to specialize the agreement to their desires.
Once the goal of agreement and the type of trust is established, the grantor can place property into the agreement. This property is officially called “trust property.” The fifth component of the agreement is what is called the beneficiary. This is the person who benefits from the trust. Normally this individual receives the trust property either in full or in part. Another vital component of such an agreement is the person who is called the trustee. This is the individual who takes care of and manages the trust to make sure everything stays according to plan. When setting up a trust, there are a number of rules and guidelines that must be followed. The specific rules will be determined by the specific type of trust that is used.
How do I dispute a trust?
Though trusts are normally intended to eliminate or reduce problems, strife, and disagreements over property, sometimes they just end up causing these issues to an even greater degree. If the trust is not clear or well thought-out in its aim, it may prompt a dispute. If you feel as though you have been wronged by a trust, you may be able to contest it. A dispute will most likely not stand if the only reason behind the contest is hurt feelings.
However, if there is a legitimate basis for the contest, the claim may stand. Some of the grounds for such a dispute include if a promise has been made to you that was not carried out or fulfilled or if the document is invalid in some way. A few of the reasons for a trust to be invalid is if the trustee lacks capacity in some way or is under undue influence. There also may be an issue over interpretation of the document. If you are looking to dispute a trust or want to defend your rights from such a dispute, it is best to have an estate planning attorney at your side. This legal professional will be able to answer any questions you have concerning the validity of a trust as well as how strong the contest might be.