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question.jpgIn Trusts and Estates

How is a trust created?

While a written document is not always required to create a trust, it is generally a good idea to always create a trust with a written document. If you are creating a trust that is going to go into effect while you are alive (which is known as an inter vivos trust), you can do this by a declaration of trust or a transfer in trust. If, instead, you are creating a trust that you do not want to go into effect until after you die, you would create a testamentary trust by including the trust terms in a legally valid will.

As for what should be included in the document creating the trust, it must identify one or more beneficiaries who are being granted equitable title in the property - that is, the person or people who you want to have the use and enjoyment of the property. The beneficiary must be identified in a way that it is clear who he or she is, or it is easy to figure out - if the designation of the beneficiary is too vague, the trust will be deemed void and invalid. The trust document must also identify one or more trustees who are being granted legal title in the property - that is, the person or people who you want to have control and management of the property. Finally, your trust document should include as statement as to the trust’s purpose (which cannot be illegal) and it should be clear that you are intending this document to actually create a trust.