Trust law trust types

Posted By on Dec 29, 2015 |

Trust law was created to protect all the parties that engage in trust relationship. Due to the nature of trusts, there are many types of the same. Some of them will be listed in this article.

GRAT, also called grantor retained annuity trust is a trust that is irrevocable. The grantor transfers all of his assets in a form of gift to the trustees. The grantor will receive annual payment from that trust until the end of the time frame stated in the document. When that time frame ends the trust is transferred to the beneficiaries that are named in the trust. GRAT is used in the USA to facilitate financial gifts which aren’t subjected to the gift tax.

Hybrid trust is a trust that uses elements from both discretionary and fixed trusts. In the case of hybrid trust, trustee has an obligation to pay already decided amount of the property covered by trust to all the benefactors. If there is some amount of property that was left after that the trustee has all of the rights over that property. In case of any problems around the property, it is best to go in Merrillville and contact  an attorney. For more ideas read here.

If legal requirements for the express trust have not been met and parties who seek the creation of trust exist, then an implied trust may be created. Only courts can create implied trust, and it is up to them to decide specific terms of that trust. Courts decide on that from all the sources of information that inform them on who holds the rights on the property, and what amount to be paid to the benefactors would be deemed fair.

Incentive trust is a trust type that uses money from the trust to encourage benefactors to do right things, from which they receive more from the trust. This is also used to discourage actions through restrictions of the rights over the trust. It is called incentive trust to easily distinguish it from discretionary trust which is quite similar to mentioned trust.

Then there is inter vivos trust, also known as living trust. This is a basic trust that a living person establishes with trustees and benefactors. This trust can include different terms that will change it to another type of trust.

Pin It on Pinterest

Share This