What Is The Trust Agreement

The person who deposits the original funds or property in the trust and creates the trust by establishing the terms of the trust, appointing trustees and appointing beneficiaries. Note that a loan through the grantor is not enough to create trust. If the settlor deposits or transfers non-cash assets into a trust, the grantor is generally deemed to have disposed of the assets at fair value at the date of the transaction. As a result, the settlor may realize a capital gain from the transfer to the trust. It is also important to note that if the trust is irrevocable, the settlor is not allowed to repossess the donated property. Once the assets have been settled in the trust, they belong to the trust and must be used for the benefit of the beneficiary of the trust. This is not the case with a revocable trust. A trust is a trust relationship with three parties in which the first party, the trustee or settlor, transfers property (often, but not necessarily a sum of money) to the second party (the trustee) in favour of the third party, the beneficiary (“abrecht”). [1] The person who sets up the trust.

The person is commonly referred to as a trustee, although sometimes you may see the terms settlor or settlor. In the following situations, the owner should be identified as a trustee for the beneficiary (p.B. Judy Smith in trust for Susie Smith): The trustees manage matters related to the trust. The trust`s business may include the prudent investment of the trust`s assets, the settlement and regular reporting to beneficiaries, the filing of required tax returns and other obligations. .