What is a Trust?
A Trust is a legal relationship wherein a person (or business) holds title to property for the benefit of another person. The terms of this relationship are usually described in a written document, often referred to as a trust instrument, trust agreement or declaration of trust.
Who are the Parties to a trust?
The creator of the trust is commonly referred to as the settlor, trustor, or grantor. The person (or business) holding title to the property for the benefit of another is called the trustee. A person for whose benefit the trust was created is called a beneficiary. The grantor may choose to be both a trustee and a beneficiary of the trust. However, a valid trust is not created if one person is both the sole trustee and the sole beneficiary.
What is a Living Trust?
A living trust, also known as an inter vivos trust, is a trust created during the lifetime of the grantor. It is fundamentally different than a testamentary trust, which is a trust created through the use of a will. Often times, clients confuse a living trust with a living will. A living will is a document that states a person’s wishes regarding cessation of health treatment in circumstances when an individual is in a persistent vegetative state.
What is a Revocable Trust?
The term “living trust” is often used to refer to a specific (and common) type of living trust – the revocable grantor trust. In such arrangement, the grantor is the trustee of the trust and is also the sole lifetime beneficiary. A successor trustee is named to serve is the grantor becomes disabled or dies. Successor beneficiaries are named to receive assets at the Grantor’s death. Under such a trust, the grantor can revoke the trust or modify it’s terms until he or she either dies or becomes legally incapacitated. The flexibility of such a trust, coupled with the right of revocation makes a revocable grantor trust a recurring client favorite.
If you have a specific legal question about trust and estate law, or would like assistance establishing a trust in Ohio, call the Law Office of Dennis E. Sawan today at 567-343-5662 to schedule a free consultation.