We’ve found that our clients benefit from reviewing our “9 Important Trust Planning Terms” so we’re sharing it with you as well. If you have any trust planning questions or concerns, be sure to consult with a qualified trust planning – estate planning attorney.
A trust is a legal agreement, technically, a contract. The trust is like an instruction book that gives guidance to the trustee as to how to carry out his duties.
A trust that, in general, cannot be changed (without court order or trust protector intervention.) Examples of irrevocable trusts would include insurance trusts, children’s trusts, spousal trusts, qualified residence trusts, and charitable trusts. A revocable trust becomes irrevocable upon the disability or death of the trust maker.
A trust that can be changed anytime while the trust maker is alive and well. The trust maker retains full control over assets and trust provisions because he serves as trustee. A revocable trust becomes irrevocable if the trust maker becomes incapacitated or dies.
The individual or corporate fiduciary (i.e. bank or trust company) that holds legal title to trust assets and carries out the instructions in the trust.
A trust created under a will typically for a surviving spouse and children.
The trust provisions (i.e. instructions) that define what the trustee must, may, and cannot do.
A “totten trust” is a pay-on-death (POD) or transfer-on-death (TOD) bank account.
The assets held in the name of the trust are called “trust corpus” or “trust res.”
When the beneficiary and the trustee are the same individual, it is called a “trust merger.” It’s as if no trust exists. This is why it’s imperative that your beneficiary serves with a co-trustee to retain asset protection.
If you’re interested in trust planning or have estate planning questions, be sure to consult a trust planning – estate planning attorney.