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Trusts

08.26.10

A trust is an instrument in which the person creating the trust (called a trustor or settlor) appoints a trustee to hold legal title to property for the benefit of one or more beneficiaries. There are many different types of trusts and some are used in the context of estate planning. Common forms of trusts include:

  1. Revocable living trusts (also called revocable inter vivos trusts)
  2. Testamentary trusts
  3. Insurance trusts.

A brief explanation of these trusts is found below.  The appropriateness of each of these trusts depends on each person's particular estate planning needs.  An inter vivos trust is a trust created during the settlor's life.  A testamentary trust is a trust created through a person's will.  An inter vivos trust can either be revocable or irrevocable, depending on the goals of the settlor.

A revocable inter vivos trust may be used so the settlor can control what happens to his or her home following the death of his spouse.  A testamentary trust is often used to leave property to minor children.  An insurance trust is a trust which is created to receive life insurance proceeds from a life insurance policy taken out on the settlor.