What is a Trust?

What is a Trust?  A trust is a way to protect assets, protect children from creditors, maintain your privacy, and avoid probate.

Hi, I’m Gary DeWitt, Estate Planning Attorney in Northwest Arkansas.

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What is a Trust?  The Legal Definition

A trust is a contract between two people for the benefit of a third person.  The two people making the contract are called the Grantor (or trustor or settlor or trust maker) and the Trustee.  The third person is usually called the beneficiary.

A grantor is the person creating the trust.  They are one party that must sign the contract.  A grantor is a required person for creating a trust.

The trustee is the person that the grantor gives the grantor’s property to.  The trustee is trusted (therefore the name trust) to manage the property for the benefit of the beneficiary (or beneficiaries).

The beneficiary is the person who benefits from the property in the trust.

What is a Trust? The “bucket” definition

A trust is a bucket you put assets into that are legally owned by the person holding the handle of the bucket.  Somebody gets to hold the handle and control the bucket.  That person is the trustee.  The person who put stuff into the bucket is the grantor, the trust maker, or the trustor.  The person who gets to “play” with and eventually own the stuff in the bucket is the beneficiary.  The beneficiary is the person that will benefit from the stuff in trust.  You can think of the beneficiary as the person who gets the stuff in the bucket eventually.

Along with the stuff, you put a set of instructions that anybody else who holds the handle must follow.  Those instructions are what form the contract between the grantor and trustee.

More Information

Feel free to call with your questions or to get my free book, “Secrets of Excellent Estate Planning”. The book is also available on my website.

I will show you how to protect what you have today, and what you leave your kids tomorrow.  You’ll be able to take advantage of my estate planning legal strategies without you or your loved ones having to deal with Probate Courts, long delays, and death tax.

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