A trust is a legal arrangement where assets are deposited and distributed according to predetermined instructions by a trustee, who can be a financial institution, relative, or neutral third party. Trustees oversee the trust and its assets, and their responsibilities are regulated by law. Trusts differ from wills in that assets are supervised by a manager until distribution. Trustees may delegate specialized tasks and must always act in the best interest of the recipients. A good trust agreement provides specific details for asset distribution.
A trust is a legal arrangement that allows a person to deposit assets and distribute them at a later time according to certain predetermined instructions. A trustee is the party who oversees the trust while it owns assets. Trustees can be financial institutions, relatives or neutral third parties. In some cases, the responsibilities and obligations of trustees are regulated by law, however, there are generally no requirements that would qualify or disqualify a person to be elected to operate in such a capacity.
Trusts are generally established because a person has assets that they want to distribute in a specific way in the future. This type of arrangement differs from a will in several ways. One of them is that, until the moment of distribution, the assets are supervised by a manager. This individual can be considered a custodian of assets. It is generally chosen by the person or group that established the trust.
Although the assets may not be in the physical possession of a manager, it is your responsibility to maintain control over them. The trust agreement may specifically describe the trustee’s requirements and limitations. The type of assets that need to be managed and distributed will also help determine what the role of the administrator is. For example, where there are bank accounts, it may be your duty to monitor balances and write checks. When dealing with real property, the trustee may be responsible for ensuring upkeep and collecting rent if the properties are rented.
Although trustees act as overseers, they may not perform all tasks themselves. There may be some specialized tasks that they do not have the ability to perform, such as reading or drafting legal documents and choosing safe investments. Trustees may have the authority to select individuals to perform these tasks and relieve them of their duties if necessary.
A good trust agreement provides specific details for the distribution of assets. These details may include the standards and types of services and products that are allowed. For example, a trust left by a grandmother to pay for her grandchildren’s medical needs may indicate that certain facilities should be used and that certain treatments, such as abortions, should be excluded.
Sometimes the details are not specific and the administrator may have to make decisions as to whether or not certain actions should be taken. When a trustee makes a decision, he must always consider the original intent of the person who started the trust. Furthermore, his actions must always be in the best interest of the recipients.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
