Trust Basics

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Trust Basics
Frequently Asked Questions About Trusts and Why
Theyre So Useful
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UNDERSTANDING THE TRUST
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What is a trust?
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A trust is a specific kind of legal relationship
or agreement that exists between someone who
creates it and the person or organization who
manages it
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Essentially, trusts act as legal entities that
own property for a specific purpose
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RELATIONSHIPS
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Who is involved in the trust relationship?
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Someone who creates a trust is called the
trustor, or sometimes a grantor or settlor
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The trustor takes some of his or her property,
transfers it into the trusts name, and names a
trustee who has the duty to manage the property
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PROPERTY
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What does the trust do with the property?
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The trust property, called the trust corpus, is
there for one specific purpose to benefit the
beneficiaries
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The trust property, called the trust corpus, is
there for one specific purpose to benefit the
beneficiaries
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The trustor chooses the beneficiaries at the time
he or she creates the trust, then appoints a
trustee to manage the trust property on behalf of
the beneficiaries
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BENEFITS
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How does the trust provide benefits?
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Depending on the type of trust you create, the
law gives trust certain abilities that normal
property ownership doesnt allow
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For example,
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For example,
Some trusts can allow your estate to avoid
probate
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For example,
Some trusts can allow your estate to avoid
probate
While others can allow you to minimize your
estate tax exposure
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TYPES
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HOW MANY TYPES OF TRUSTS ARE THERE?
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There are too many trust to list here, and each
of them has specific benefits and drawbacks
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You can generally categorize trusts by their
main characteristics
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You can generally categorize trusts by their
main characteristics
such as testamentary trusts, or those you
establish through your will that dont take
effect until youre dead
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You can generally categorize trusts by their
main characteristics
such as testamentary trusts, or those you
establish through your will that dont take
effect until youre dead
and living trusts, or those that take effect
while you are still living
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CREATION
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How do I create a trust?
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You created a trust by setting out the trust
terms in a trust instrument
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This document contains the name of the trustee
and the beneficiary, the terms under which the
trust will operate, and the purposes for which
you create trust
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FLEXIBILITY
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What type of trust should I create?
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That depends on your individual circumstances
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Your estate planning attorney will be able to
explain each of the trusts available to you
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and how each of them can help you meet your
estate planning goals
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LEARN MORE ABOUT TRUSTS IN NORTH DAKOTA AND
MINNESOTA
LEARN MORE ABOUT TRUSTS IN NORTH DAKOTA AND
MINNESOTA
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