A trust is an agreement to contain virtual money, property, and assets. An agreement of trust includes three parties; a trustee (it could be an institution or a person too), a beneficiary (who gets the benefit), and a grantor, trustor, or donor (the person who sets up the trust).
It is essential to understand the complications of a testamentary trust; for that, you have to hire the services of a professional law firm such as vqnlawfirm. The agreement of trust comes into being only when the trustee passes away.
Main Goals of a Trust
The primary goal of any trust is to transfer the property and assets to the heirs and beneficiaries (while minimizing the estate taxes) once the trustee dies. But different types of trust accomplish different goals. Some trusts are specially used by married couples, some to benefit certain types of people like kids or spouses (and pets) and trusts that benefit welfare organizations and charities. Let’s have a look at some common types of trusts below:
Common Types of Trusts
The trusts can be categorized into the following four categories:
Inter vivos trusts or living trusts: these trusts are created and activated during the lifetime of the grantor or trustor
Testamentary trusts: these trusts came into existence after the death of the grantor
Revocable trusts: these trusts can be changed or revoked anytime and entirely by the grantor
Irrevocable trusts: these trusts can not be changed or revoked by the grantor ever once they are implemented
Revocable Living Trusts
Revocable living trusts or inter vivos trusts are created during the lifetime of the grantor. Moreover, they can be revoked or modified partially or entirely at the instruction of the grantor.
Irrevocable Trust
An irrevocable trust (also called an inter vivos trust) can be created during the grantor's lifetime or after death. The grantor can not take the property and assets out of trust once they are transferred into an irrevocable trust.
Ending Notes
The fundamental aim of any trust is to save a grantor’s life and give it back to beneficiaries and heirs once the grantor is passed away. If you have any queries regarding the above article or anything related to law, feel free to contact the legal solutions law firm.