What is a living trust?
The living trust is a legal act of trust that is a revocable trust, in which a person gives to another the ownership of some assets to give it the benefit of a third party. Below is a brief introduction to this vast subject.
Participants of a Living Trust
Trustor or settlor : This is who constitutes the trust, transmitting ownership of the asset or property to the trustee. to meet the specific purpose of the trust.
Trust : In general it can be anyone. Therefore they can be natural or legal persons , public or private, national or foreign. etc. However in the case of financial trust, they can only offer their services as trustees, those subject to the respective or legal persons specifically authorized for this purpose financial institutions law.
Beneficiary : is one in whose favor the administration of the trust property is exercised. It can be a natural or legal person who can not exist at the time the contract or will, always containing the data to allow future identification. You can designate more than one beneficiary and substitutes beneficiaries. If the beneficiary does not come into existence, does not accept, or resignation, the beneficiary will be the trustee and failing that will be the settlor.
Trustee : It is who receives the trust assets once extinguished the trust for compliance with the term or condition.
The essential purpose of the trust is the creation of a separate estate with the trust assets, which are assigned in trust to the trust property, but that does not make up its property.
The trust may be about all kinds of goods that are in commerce, present or futures and determined in the contract or determinable in accordance with the requirements and characteristics therein described. it is important to note that, during the indenture, the trustee becomes the fiduciary ownership of the assets transferred to the duty to administer as the purpose of contract, taking charge of re-transmitting the ownership of the property at the time of termination of the contract. Different types of trust the trust can be established to ensure compliance with debt obligations and to administer property.
How to form a Living Trust
Through the services of a reputed and an experienced attorney who specialize in trust formation and estate planning you can get all the necessary guidance and legal frame work done by them to set up living trusts sun city az. This would be extremely beneficial for you in the long run and helps you to secure your future.
Advantages of having a Living Trust
The living trust is a contract that has been seeing an “explosion” in recent years due to their use, mainly in the field of estate and asset planning, investment, although this does not mean that it cannot be used perfectly in other areas of business and / or lifetime. Guarantee a loan, leaving wills, administer property and secure funding, they are just some examples.
This contract has a number of advantages that make it attractive when making any business and at the same times securing the future of an individual. Undoubtedly, the main thing is the constitution of the fiduciary ownership of the trust assets, resulting in the separation of the Trust Estate of personal assets of the trustees, beneficiaries and the trustee.
Thus, creditors of the above subjects may not use the assets of the trust to collect their debts. Conversely, creditors of the trust may not make avail the personal assets of the parties. Sometimes you can only see -administrator, but never the trustor and/or beneficiaries.
Another advantage of the trust is the flexibility it has. According to the nature of the business, the contract may be given a proper structure to each particular case, providing the specific characteristics of each project.
It also has the unique feature of not having legal personality, but it is a contract that serves as a means to meet specific purposes. Instead, it has legal personality, as stipulated by the current legislation.
Depending on the type of living trust and the agreed clauses certain advantages, here are some that usually apply to all or most trust agreements are obtained:
- Incapacity management
- Managed assets under living trust are indefeasible.
- No probate required
- Accounting and independent audits.
- Tax benefits.
- It can be used to perform unlimited purposes, in so far as they are legitimate.