A trust is a powerful estate planning tool that has many advantages, and there are several types of property that may be held by a trust. Let’s take a quick look at what a trust is…
A trust is a legal arrangement in which a ‘grantor’, the person creating the trust, transfers ownership of property into the name of the trust and selects a trustee to manage it. The trustee may be a family member, a trust attorney, or, in the case of a living trust, the grantor. The trustee is tasked with managing or distributing the property for the benefit of the beneficiaries named within the trust documents.
Property that may be held within a trust generally falls into three categories:
Real estate may be held within a trust, whether it is a primary residence, a farm or an investment property.
Tangible Personal Property
Tangible personal property may also be held by a trust, and the term tangible means that it is property that can be touched, such as a vehicle, boat or a jewelry collection.
Intangible Personal Property
Intangible property is property that you cannot touch, such as a the right to receive the proceeds of a life insurance policy or the right to future ownership. Intangible property includes securities, such as stocks and bonds, which are popular forms of trust property. Other forms of intangible property include royalties, patents and partnership interests.
Transferring property into a trust is known as funding a trust, and each type of property requires the proper transfer to ensure it is completed properly.
Trust property comes in many different forms, and each form of property requires a different method of management. Working with a Trust Attorney ensures that not only are you setting up a trust that meets your needs, but that each step of setting up a trust is completed properly.