A trust is a legal entity managed by a trustee. A person who creates a trust (the settlor) transfers property or assets to a trust that is then managed by the trustee for the people the trust was set up to benefit (the beneficiaries). There are two main categories of trusts: intervivos and testamentary. Intervivos trusts are said to be “living” because they are created during the lifetime of the settlor when the settlor transfers property or assets to the trust. Testamentary trusts, by contrast, are created by a settlor’s will and only come into existence after the settlor dies. Trusts are a useful estate planning tool because they allow the settlor control over how property and assets are managed, can have beneficial tax implications and can protect property from certain types of claims.
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*This material is educational only, it does not constitute legal advice, it should not be relied on and it does not create an attorney-client relationship.