Trust Forms for Asset Protection and More - Resignation As Trustee
Is a Trust Form Right for You? Asset Protection Trust
Trust forms are not just for those with large assets. While asset protection and the desire to avoid probate are common reasons for creating a trust, there are many types of trusts and different reasons for establishing them. For example, a special needs trust might be established for children or dependent adults to preserve their eligibility for benefits. A spendthrift trust might be set up to guard against wasting of funds by financially irresponsible beneficiaries. A charitable trust might be created for beneficent purposes, as well as tax advantages.
If you're wondering what is a living trust, there are two basic categories. In general, a trust may be a revocable trust, meaning the grantor retains certain powers over the trust, such as termination of trust, or an irrevocable trust, which cannot be changed or terminated by the grantor. There are also living trusts, which are created while the grantor is alive, and testamentary trusts, which are created by will and are formed upon the grantor's death. We will examine below some of the more popular specific types of trust forms and the reasons for their use:
- Qualified Terminal Interest Property Trust - A qualified terminal interest property trust allows the grantor to leave income to a surviving spouse while maintaining control of distribution of the trust assets to other heirs when he surviving spouse dies.
- Special Needs Trust - A special needs trust provides a means for a person who is disabled to receive income without losing eligibility for other benefits, such as SSI, Medicaid, and other governmental programs.
- Revocation of Trust - This form can be used to revoke revocable trusts, such as a revocable living trust.
- Family Trust - A family trust is used to distribute trust fund assets to blood relatives. Trust funds are only distributed within the grantor's family.
- Asset Protection Trust - This is a general label given to trust funds established to protect assets from creditors and they may also be used for avoiding probate.
- Real Estate Investment Trust - A real estate investment trust agreement allows investors to participate in the real estate ownership, management, and development or real estate related loans.
- Trust Amendment - This form is used to make changes, such as naming a new beneficiary of a grantor trust when minor children are born or naming a successor trustee to replace a trustee who is unavailable.
- Deed of Trust - A deed of trust is used in place of a mortgage in some states to give possession of the deed to a trustee until the loan is fully paid.
- Spendthrift Trust - This is a means of leaving assets to a financially irresponsible beneficiary so that the trustee will prevent the beneficiary from using the trust funds as security for a loan and creditors from attaching the assets.
- Charitable Trust - This allows the grantors to make donations and realize tax benefits. Often, the grantor has possession of the property and it passes to the charity at death, with tax savings for the estate.
- Medicaid Income Trust - A Medicaid income trust is a specialized trust form used to preserve a person's eligibility for receiving Medicaid, especially in the face of needing long-term care or entering a nursing home. This trust prevents assets from disqualifying a person's eligibility to receive institutional care services, or home or community based services.
- Pet Trust -If you have pets, this trust fund may be created to provide for their care if you are no longer able to care for your animals yourself.
- Land Trust - A land trust often establishes conservation easements to limit the development of land and preserve it in its natural state, while also allowing tax advantages to the land owner.
Some of the basic terms commonly encountered when setting up a trust are the following:
Grantor - This is the person who establishes the trust. It is possible for the grantor to also be the trustee.
Trustee - This is the person who is responsible for carrying out the terms of the trust, managing the assets, and making distributions according to the instructions in the trust fund document. The trustee is also responsible for filing necessary tax returns and taking any necessary court action, such as a termination of trust when it is uneconomical to continue.
Successor Trustee - This is the person named to take over the duties of trustee when the originally named trustee is unable or no longer willing to serve.
Grantor Trust - This is a trust fund in which the grantor retains control over management of the trust assets and distribution of trust income. It is also a term used in the secondary mortgage market for selling pass-through securities to investors.
Settlor - This is another term used for the grantor or maker of the trust.
Beneficiary - This is the person receiving distributions of income or other assets from the trust fund. It is possible for the same person to be the grantor, trustee, and beneficiary of the same trust fund.
Probate - This is the procedure used to accept a will in court and have the estate administered by the executor or administrator. A trust document isn't required to be filed in court. Assets placed in a trust do not have to go through the probate process and therefore, trust document isn't made a public document. Avoiding probate and protecting privacy are common reasons for creating a trust fund.
Inter Vivos Trust - An inter vivos trust is another term for a living trust, meaning a trust fund that comes into existence while the grantor is still alive.
Uniform Trust Code (UTC) - This is a model code which has been adopted in many states in order to provide a uniform and comprehensive set of trust laws to be followed. Because the Uniform Trust Code is a default set of laws, a grantor is still able to draft a trust that is customized to his or her needs, avoiding much of the application of the laws under the Uniform Trust Code.
Tips for Preparing Trust Forms for Asset Protection and More
- Find the appropriate form. Pick the document sample that fits your state. US Legal Forms offers more than 85 thousand state-specific templates that you can download and submit. In addition, the platform gives you an helpful description of type of real estate contract and agreement so that you can pick the appropriate template.
- Point out parties and property. Begin filling in the names of both sides. You don't need to repeat these names more in the file. It is enough to define them once and replace them with the terms Purchaser and Owner. Identify the address and legal description of the property in your Trust Forms for Asset Protection and More.
- Establish the terms and deadlines. The cost doesn't appear out of the blue. Calculate how much your estate may be worth and decide just how much you would like to get for it. Also, go through the amount of earnest money and the time frame when you want to get the rest. It is important to set down-to-earth deadlines in the sales contract.
- Sign to enforce Trust Forms for Asset Protection and More. You and another party need to sign the contract so it will be legitimate. Get it done by face-to-face meeting or utilize a legally-binding eSignature. But to close the deal in general, you should search for other property templates. Avoid spending time on seeking and choose a ready-made package of documents with US Legal Forms.