Types of Trusts

Types of Trusts

trust can be created during a person’s lifetime and survive the person’s death. A trust can also be created by a will and formed after death. We’ve provided a basic overview of trustshere. Once assets are put into the trust they belong to the trust itself, not the trustee, and remain subject to the rules and instructions of the trust contract. Most basically, a trust is a right in property, which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds title to the trust property, and the beneficiary is the person who receives the benefits of the trust. While there are a number of different types of trusts, the basic types are revocable and irrevocable.

Revocable Trusts

We talk more in depth on revocable trusts on this page.

Revocable trusts are created during the lifetime of the trustmaker and can be altered, changed, modified or revoked entirely. Often called a living trust, these are trusts in which the trustmaker transfers the title of a property to a trust, serves as the initial trustee, and has the ability to remove the property from the trust during his or her lifetime. Revocable trusts are extremely helpful in avoiding probate. If ownership of assets is transferred to a revocable trust during the lifetime of the trustmaker so that it is owned by the trust at the time of the trustmaker’s death, the assets will not be subject to probate.

Although useful to avoid probate, a revocable trust is not an asset protection technique as assets transferred to the trust during the trustmaker’s lifetime will remain available to the trustmaker’s creditors. It does make it more somewhat more difficult for creditors to access these assets since the creditor must petition a court for an order to enable the creditor to get to the assets held in the trust. Typically, a revocable trust evolves into an irrevocable trust upon the death of the trustmaker.

Irrevocable Trust

An irrevocable trust is one which cannot be altered, changed, modified or revoked after its creation. Once a property is transferred to an irrevocable trust, no one, including the trustmaker, can take the property out of the trust. It is possible to purchase survivorship life insurance, the benefits of which can be held by an irrevocable trust. This type of survivorship life insurance can be used for estate tax planning purposes in large estates, however, survivorship life insurance held in an irrevocable trust can have serious negative consequences.

Asset Protection Trust

An asset protection trust is a type of trust that is designed to protect a person’s assets from claims of future creditors. These types of trusts are often set up in countries outside of the United States, although the assets do not always need to be transferred to the foreign jurisdiction. The purpose of an asset protection trust is to insulate assets from creditor attack. These trusts are normally structured so that they are irrevocable for a term of years and so that the trustmaker is not a current beneficiary. An asset protection trust is normally structured so that the undistributed assets of the trust are returned to the trustmaker upon termination of the trust provided there is no current risk of creditor attack, thus permitting the trustmaker to regain complete control over the formerly protected assets.

Charitable Trust

Charitable trusts are trusts which benefit a particular charity or the public in general. Typically charitable trusts are established as part of an estate plan to lower or avoid imposition of estate and gift tax. A charitable remainder trust (CRT) funded during the grantor’s lifetime can be a financial planning tool, providing the trustmaker with valuable lifetime benefits. In addition to the financial benefits, there is the intangible benefit of rewarding the trustmaker’s altruism as charities usually immediately honor the donors who have named the charity as the beneficiary of a CRT.

Constructive Trust

A constructive trust is an implied trust. An implied trust is established by a court and is determined from certain facts and circumstances. The court may decide that, even though there was never a formal declaration of a trust, there was an intention on the part of the property owner that the property be used for a particular purpose or go to a particular person. While a person may take legal title to property, equitable considerations sometimes require that the equitable title of such property really belongs to someone else.

Special Needs Trust

A special needs trust is one which is set up for a person who receives government benefits so as not to disqualify the beneficiary from such government benefits. This is completely legal and permitted under the Social Security rules provided that the disabled beneficiary cannot control the amount or the frequency of trust distributions and cannot revoke the trust. Ordinarily when a person is receiving government benefits, an inheritance or receipt of a gift could reduce or eliminate the person’s eligibility for such benefits.

By establishing a trust, which provides for luxuries or other benefits which otherwise could not be obtained by the beneficiary, the beneficiary can obtain the benefits from the trust without defeating his or her eligibility for government benefits. Usually, a special needs trust has a provision which terminates the trust in the event that it could be used to make the beneficiary ineligible for government benefits.

Special needs has a specific legal definition and is defined as the requisites for maintaining the comfort and happiness of a disabled person, when such requisites are not being provided by any public or private agency. Special needs can include medical and dental expenses, equipment, education, treatment, rehabilitation, eye glasses, transportation (including vehicle purchase), maintenance, insurance (including payment of premiums of insurance on the life of the beneficiary), essential dietary needs, spending money, electronic and computer equipment, vacations, athletic contests, movies, trips, money with which to purchase gifts, payments for a companion, and other items to enhance self-esteem. The list is quite extensive.

Parents of a disabled child can establish a special needs trust as part of their general estate plan and not worry that their child will be prevented from receiving benefits when they are not there to care for the child. Disabled persons who expect an inheritance or other large sum of money may establish a special needs trust themselves, provided that another person or entity is named as trustee.

Spendthrift Trust

A trust that is established for a beneficiary which does not allow the beneficiary to sell or pledge away interests in the trust is known as a spendthrift trust. It is protected from the beneficiaries’ creditors, until such time as the trust property is distributed out of the trust and given to the beneficiaries.

Tax By-Pass Trust

A tax by-pass trust is a type of trust that is created to allow one spouse to leave money to the other, while limiting the amount of federal estate tax that would be payable on the death of the second spouse. While assets can pass to a spouse tax-free, when the surviving spouse dies, the remaining assets over and above the exempt limit would be taxable to the children of the couple, potentially at a rate of 55 percent. A tax by-pass trust avoids this situation and saves the children perhaps hundreds of thousands of dollars in federal taxes, depending upon the value of the estate.

Totten Trust

A Totten trust is one that is created during the lifetime of the grantor by depositing money into an account at a financial institution in his or her name as the trustee for another. This is a type of revocable trust in which the gift is not completed until the grantor’s death or an unequivocal act reflecting the gift during the grantor’s lifetime. An individual or an entity can be named as the beneficiary. Upon death, Totten trust assets avoid probate. A totten trust is used primarily with accounts and securities in financial institutions such as savings accounts, bank accounts, and certificates of deposit. A Totten trust cannot be used with real property. A Totten Trust provides a safer method to pass assets on to family than using joint ownership.

To create a totten trust, the title on the account should include identifying language, such as “In Trust For,” “Payable on Death To,” “As Trustee For,” or the identifying initials for each, “IFF,” “POD,” “ATF.” If this language is not included, the beneficiary may not be identifiable. A Totten trust has been called a “poor man’s” trust because a written trust document is typically not involved and it often costs the trustmaker nothing to establish.

Create a Trust Today

Forming a trust is a great way to protect your family’s assets and to make sure loved ones are secure. You may decide that the complexity required for such a trust would benefit from the advice of an estate planning lawyer. Get ahead of the curve and get some peace of mind for your family by calling
Ascent Law today.

Free Consultation with a Utah Estate Planning Attorney

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Health Care Directives

Health Care Directives

Health care directives are a part of estate planning that most people don’t think much about. As an estate planning lawyer, I’m often shocked to find that most people, even elderly folks, don’t have one.

Health care directives allow you to specify your health care decisions beforehand in case you are unable to express them during a medical emergency. You may be wondering what duty your health care providers have in enforcing your health care directives.

Many people often wonder whether or not their medical care providers have a duty to follow their wishes when it comes to their health care. These wishes are often recorded in documents like living wills and health care directives.

Duty to Follow Health Care Directives

In general, medical care providers are generally held to a pretty strict duty to comply with your recorded wishes that relate to your health care if you become incapacitated. In addition, if your health care directives or living will appoint someone as a legal agent in charge of your health care (called a health care agent), doctors and other medical providers are also under a duty to follow their orders and decisions about your care.

Exceptions to a Health Care Directive

However, there are some situations in which your doctor or medical care provider can go against the wishes that you have set forth in your health care directives. Health care providers can do so when:

  • The directive set forth decisions that go against the conscience of the doctor or individual medical services provider,
  • The directives set a policy that goes against the policies of the hospital or other medical institution based on reasons of conscience, or
  • The directives include decisions that would result in ineffective health care, or asks health care providers to adopt health care standards that violate those of the provider, hospital or other medical institution.

However, even if these factors are present, this does not mean that your doctor or health care provider can simply ignore your health care directives. Instead, if your doctor or health care provider thinks that they will go against the wishes and directions set forth in your health care directives, or against the orders of your health care agent, they must immediately inform you or your agent. When this happens, you or your agent will have the option of taking steps to have you transferred to another doctor or medical facility where your wishes and instructions will be honored. Indeed, if your doctor or medical care provider refuses to do so and still goes against your wishes and orders, the doctor may be liable for damages to you.

Pregnancy and your Health Care Directive

Despite what is written above, doctors and medical care providers may be able to legally ignore your wishes and orders contained in your health care directives if you are pregnant. In order to have your wishes still be carried out, you should specifically state in your health care directives what your wishes are for your care when you are pregnant.

Even if you specify your wishes for when you are with child, your doctor may still be able to override your wishes in order to keep you and your fetus alive. This is especially true if you are in your second or third trimester.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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Power of Attorney for Living Wills and Healthcare

Power of Attorney for Living Wills and Healthcare

This article is part of our Estate Planning Series. You know, end-of-life issues can be extremely complex, and many people avoid making decisions about how such issues will be handled because it can be an uncomfortable and difficult subject to address. However, it is crucial that you do spend time thinking about how you want your final days to play out, both for your own personal comfort and for the well-being of your loved ones. At the very least, strongly consider making a living will and determining who you want to grant a durable power of attorney for healthcare decisions.

The Living Will

A living will is a document that sets forth what to do, and what not to do, if you are incapacitated and unable to make those decisions. This could be because you are in a coma, suffered a debilitating injury, or because you have become seriously mentally incapacitated. Here are some of the most basic considerations to account for in your living will:

  • Life-Prolonging Medical Care: Your living will should state whether you want to receive life-prolonging treatments at the end of your life. Typical treatments include blood transfusions, respirators, dialysis, drug treatment and surgery.
  • Do Not Resuscitate (DNR) Directives: In conjunction with directives about whether you want to receive life-prolonging medical care, most living wills will state whether or not you want to be resuscitated (CPR) at the end of your life. It is advisable to let your doctor and local hospital know about your DNR decisions and, if you do not want paramedics to try to resuscitate you, to wear a Medic Alert bracelet, anklet or necklace with those instructions.
  • Life-Prolonging Food and Water: Often, if someone is comatose or seriously injured, they will only be able to survive through the external administration of food and water. When such treatment is stopped, the patient will die naturally of dehydration and medical professionals will typically apply medication to make such a passing comfortable. You should specify whether you want to receive food and water, under what conditions and timelines you would like to receive such treatment and when to stop it.
  • Pain Management: Even if you decide you want to let death occur naturally, without intervening care, it does not mean you have to die with pain. Now commonly called comfort care or palliative care, the goal of such care is to emphasize qualify of life and dignity by keeping the patient comfortable and free of pain until they pass. Specify in your living will if you want doctors to emphasize pain management at the end of your life.

Power of Attorney for Healthcare

It can be extremely helpful to give someone a durable power of attorney for healthcare decisions. This is a part of probate law that many people understand the essential need for. You can give this person as much or as little power as you like, but if you aren’t specific, most states will give them comprehensive power over your end-of-life medical decisions. For example, someone with a durable power of attorney for healthcare decisions will typically have:

  • The power to offer or deny consent for medical treatments so long as it doesn’t disagree with anything in your living will.
  • The power to decide what medical facilities you should go to.
  • The power to decide which doctors and medical personnel you should see.
  • The power to go to court over whether to receive or withhold medical treatment.
  • The power to decide how your body will be handled after death, often including organ donation. If you have specific feelings on these matters, write them into your living will. Living wills always trump the decisions of your power of attorney designee concerning your healthcare.
  • Access to your medical records.
  • Visitation rights.

You can give a person complete authority to make all decisions, or limit them significantly to make only specific decisions. Be careful when greatly limiting such power, however, because the primary reason to have such a person is because your living will cannot cover every possibility. If you want specificity, it is better to do that in your living will, which the person with a durable power of attorney cannot override.

Free Consultation with an Estate Planning Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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Estate Planning Lawyer

When people think of estate planning, they tend to focus on the distribution of an individual’s assets and other property when he or she passes away. Although that’s certainly a component of estate planning, there’s much more that a person can do to ensure that his or her intentions and wishes are honored in the case of mental incapacity or upon passing away. This section provides resources related to estate planning, including a discussion of estate laws, tips for creating an estate plan, and an explanation of how probate works.

Estate Planning Lawyer

Why Estate Planning Is Important

Estate planning allows a person to make decisions that include medical treatment care options and the distribution of property when he or she passes away. Planning ahead provides time to carefully consider and review estate decisions and to create tailored plans that preempt any disputes. As a side benefit, a person who plans ahead will become knowledgeable about important issues such as estate taxes. Keep in mind that estate plans can generally be amended, so you needn’t fear being locked into a “rough draft” plan that’s created early on in life.

The Risks If You Don’t Plan Your Estate

A person who doesn’t plan his or her estate runs the risk of family members fighting over property and over difficult decisions such as end-of-life care. If a dispute over the estate goes to court, expenses can quickly add up, the process can be painfully slow, and in extreme cases, family relationships can be ruined. Land can be troublesome to divide, with the problem compounded if some family members want to sell, against the wishes of other family members.

Types of Estate Plans

As many people know, planning an estate involves the distribution of real property, bank accounts, insurance policies, investments, and/or other assets a person owns when he or she passes away. However, estate planning also includes trusts, school tuition accounts, and other plans that can take effect during a person’s lifetime, and remember that medical care and end-of-life decisions are also forms of estate planning. This section provides an overview of common estate plans, and an attorney can help you to fully understand the plan options available to you.

Factors to Consider When Planning Your Estate

The various forms of estate plans have their unique features and benefits. For example, one type of plan may provide advantageous tax benefits compared to another plan, and certain requirements may apply to one type of plan but not to another. Along with the federal government, states have passed estate laws, and it’s important to understand the laws that apply as you begin planning. If you do so, you can minimize costs and tax payments while tailoring a plan that suits your needs and carries out your intentions.

How an Estate Planning Attorney Can Help You

An attorney can help you to understand the basics of estate planning, and he or she can help you to create a plan that reflects your wishes. This section provides information for consulting with an experienced estate planning attorney in your area.

Free Consultation with a Utah Estate Planning Lawyer

If you are here, you may need to get your estate planning done or you need help with an estate matter. If you do, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506
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Payable on Death Beneficiary for Accounts

Planning your estate doesn’t have to be expensive or complicated. You can transform your bank accounts into an estate planning tool by designating a beneficiary for your checking, savings and other deposit accounts. Simply ask your banker for their payable on death (POD) beneficiary form.

Payable on Death Beneficiary for Accounts

POD accounts function like an informal trust. Some banks even refer to these accounts a Totten or tentative trusts. After your death, the account beneficiary avoids probate and can claim the money directly from your bank. During your lifetime, the beneficiaries have no rights to the account. You can spend the money, close the account or change your beneficiaries. The account will function just as it did before you listed a beneficiary.

Who Can be Your Beneficiary

The beneficiary rules for POD accounts are very flexible. You can choose to have one beneficiary for several accounts or multiple beneficiaries for one account. Nonprofit organizations can serve as your beneficiary. Just be certain they are recognized as a charitable entity by the Internal Revenue Service. Depending on the laws of your state, you may be able to designate an alternate beneficiary, in case your first named beneficiary dies before you. If there are no living beneficiaries at the time of your death, the account will pass through probate.

What Accounts Can Have a Beneficiary

You can name a POD beneficiary for your checking and savings accounts, money markets, CDs and U.S. Savings Bonds. But you will probably need to complete a beneficiary registration form for each account. Joint accounts, such as held by a married couple, can also be transferred into POD account. The beneficiary will only receive rights to the assets after the last account owner dies.

Stocks and other securities can be transferred by setting up transfer on death (TOD) registration on the account. Most states have adopted the Uniform TOD Security Registration Act, but brokerage firms can still choose not to offer TOD registration.

How Do You Claim A POD Account?

Claiming a POD account is a straightforward process. The beneficiary goes to the bank or credit union holding the account and presents a copy of your death certificate. They will also need to show valid identification and fill out transfer forms. Some states have a short waiting period, but otherwise the beneficiary can claim the funds immediately.

TOD beneficiaries must take steps to re-register the securities in their names. This typically involves sending a copy of the death certificate and an application for re-registration to the transfer agent

Be aware, POD accounts are subject to outside claims. So you can’t use a POD account to avoid paying your debts or to disinherit a spouse. You must leave enough money in your estate to tie-up your affairs. Plus if you live in a community property state, your spouse has a right to half of your assets, including those only listed in your name.

Tax Issues with POD Accounts

After you die, estate or income taxes may be left owing. For example, if you are working at the time of your death, your estate administrator will file your last tax return. It is important that your will or living trust state if the POD account beneficiary is required to use funds to cover any tax liability.

Your beneficiary may also be subject to an inheritance tax depending on the laws of your state, and you family relationship. In most states, surviving spouses are exempt from inheritance tax. But unrelated individuals are frequently taxed on an inheritance.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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10 Reasons to Have a Will

Having a will is arguably one of the most important things you can do for yourself and your family. Not only can a will legally protect your spouse, children, and assets, it can also spell out exactly how you would like things handled after you have passed on.

10 Reasons to Have a Will

While each person’s situation varies, here are the top ten reasons to have a will.

1) You decide how your estate will be distributed. A will is a legally-binding document that lets you determine how you would like your estate to be handled upon your death. If you die without a will, there is no guarantee that your intended desires will be carried out. Having a will helps minimize any family fights about your estate that may arise, and also determines the “who, what, and when” of your estate.

2) You decide who will take care of your minor children. A will allows you to make an informed decision about who should take care of your minor children. Absent a will, the court will take it upon itself to choose among family members or a state-appointed guardian. Having a will allows you to appoint the person you want to raise your children or, better, make sure it is not someone you do not want to raise your children.

3) To avoid a lengthy probate process. Contrary to common belief, all estates must go through the probate process, with or without a will. Having a will, however, speeds up the probate process and informs the court how you’d like your estate divided. Probate courts serve the purpose of “administering your estate”, and when you die without a will (known as dying “intestate”), the court will decide how to divide estate without your input, which can also cause long, unnecessary delays.

4) Minimize estate taxes. Another reason to have a will is because it allows you to minimize your estate taxes. The value of what you give away to family members or charity will reduce the value of your estate when it’s time to pay estate taxes.

5) You decide who will wind up the affairs of your estate. Executors make sure all your affairs are in order, including paying off bills, canceling your credit cards, and notifying the bank and other business establishments. Because executors play the biggest role in the administration of your estate, you’ll want to be sure to appoint someone who is honest, trustworthy, and organized (which may or may not always be a family member).

6) You can disinherit individuals who would otherwise stand to inherit. Most people do not realize they can disinherit individuals out of their will. Yes, you may wish to disinherit individuals who may otherwise inherit your estate if you die without a will. Because wills specifically outline how you would like your estate distributed, absent a will your estate may end up on the wrong hands or in the hands of someone you did not intend (such as an ex-spouse with whom you had a bitter divorce).

7) Make gifts and donations. The ability to make gifts is a good reason to have a will because it allows your legacy to live on and reflect your personal values and interests. In addition, gifts up to $13,000 are excluded from estate tax, so you’re also increasing the value of your estate for your heirs and beneficiaries to enjoy. Be sure to check the current laws for your year to learn the most up-to-date gift tax exclusions.

8) Avoid greater legal challenges. If you die without a will, part or all of your estate may pass to someone you did not intend. For example, one case involved the estate of a deceased son who was awarded over $1 million from a wrongful death lawsuit. When the son died, the son’s father – who had not been a part of his son’s life for over 32 years – stood to inherit the entire estate, leaving close relatives and siblings out of the picture!

9) Because you can change your mind if your life circumstances change. A good reason for having a will is that you can change it at any time while you’re still alive. Life changes, such as births, deaths, and divorce, can create situations where changing your will are necessary.

10) Because tomorrow is not promised. Procrastination and the unwillingness to accept death as part of life are common reasons for not having a will. Sometimes the realization that wills are necessary comes too late – such as when an unexpected death or disability occurs. To avoid the added stress on families during an already emotional time, it may be wise to meet with an estate planning lawyer to help you draw up a basic estate plan at the minimum, before it’s too late. Be sure to read What Not To Include When Making a Will for more wills information.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews


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Trustee Powers, Duties and Challenges

trustee power duties and challenges

A Trustee is a fiduсiаrу that has a rеѕроnѕibilitу to оvеrѕее the mаnаgеmеnt оf аnу property оwnеd bу a truѕt. Truѕtееѕ еxiѕt in Mау categories аnd may inсludе individuаlѕ or institutions ѕuсh аѕ trust соmраniеѕ оr bаnkѕ аnd in some саѕеѕ a соmbinаtiоn оf both.

Some оf thе mаjоr responsibilities оf thiѕ реrѕоn inсludе thе mаnаgеmеnt оf all the property thаt a truѕt owns, which iѕ dоnе to bеnеfit truѕt beneficiaries. Dutiеѕ vаrу dереnding оn thе аѕѕеtѕ that аrе owned bу the truѕt. If, fоr example, the truѕt invоlvеѕ invеѕtmеnt аnd bank ассоuntѕ, then thе реrѕоn will bе charged with thе rеѕроnѕibilitу tо оvеrѕее thе accounts. If thе truѕt соnѕiѕtѕ оf rеntаl rеаl еѕtаtе, then the rеѕроnѕibilitу оf thе fiduсiаrу will inсludе thе mаnаgеmеnt оf thiѕ property.

Thе fiduciary саn dеlеgаtе ѕоmе of thе duties to оthеrѕ, but thiѕ depends оn thе ѕtаtе lаw аѕ wеll аѕ thе terms of agreement with thе truѕt. Thiѕ mау invоlvе hiring a finаnсiаl аdviѕеr to manage some of the investments or hаvе a рrореrtу mаnаgеr tо oversee thе mаnаgеmеnt оf rental рrореrtу.

It iѕ imроrtаnt tо hаvе a fiduсiаrу with thе capacity tо use sound judgmеnt аnd duе diligence whеn it comes tо thе delegation оf dutiеѕ. Hе ѕhоuld аlѕо bе one that dоеѕ nоt bring аnу conflict оf intеrеѕt ѕuсh аѕ thrоugh hiring a rеlаtivе оr ѕibling tо be thе truѕt’ѕ invеѕtmеnt adviser. Thеѕе аrе some of the dutiеѕ thаt should bе carried оut with the соnѕеnt of thе beneficiary in оrdеr to uрhоld рrоfеѕѕiоnаliѕm.

It iѕ imроrtаnt аt thе timе of аdminiѕtеring thе truѕt to еnѕurе thаt the trustees keep аt bау аll реrѕоnаl goals and feelings in оrdеr tо ѕеrvе the bеѕt interests оf thе bеnеfiсiаriеѕ оf the specific truѕt. Thiѕ is what iѕ knоwn аѕ thе fiduciary duty оf thiѕ рrоfеѕѕiоnаl. A detailed аnd wеll written agreement iѕ provided in оrdеr tо рrоvidе guidаnсе to thе trustees оn thе top mоѕt рriоritiеѕ of thе trust bеnеfiсiаrу.

There are trusts agreements thаt mау hаvе bееn crafted for thе provision of еduсаtiоn tо thе grаndсhildrеn and in ѕоmе саѕеѕ, it may ѕресifу thе kind оf ѕсhооlѕ they should аttеnd аnd thе money to be раid. Sоmе оf thе dutiеѕ may inсludе lооking аt other аѕѕеtѕ оutѕidе оf thе trust that might аlѕо bеlоng tо thе bеnеfiсiаrу bеfоrе the diѕtributiоnѕ аrе made.

It is a rеԛuirеmеnt in mаnу inѕtаnсеѕ fоr trustees tо ѕееk guidаnсе from thе ѕtаtе lаw or even rеԛuirе the соunѕеl оf a judgе in оrdеr tо mаkе the mоѕt аррrорriаtе dесiѕiоnѕ in сеrtаin сirсumѕtаnсеѕ. Truѕtееѕ or executors are аllоwеd tо run tеѕtаtоr’ѕ business fоr uр tо оnе year with their consent.

Truѕtееѕ hоwеvеr have other powers fоr саrrуing оut thеir duties undеr thе truѕt dосumеntѕ. Some оf thе powers include thе powers оf appropriation, the power оf advancement, the роwеr tо delegate, thе power of trustees tо сhаrgе, power tо inѕurе, tо invеѕt аnd run the tеѕtаtоrѕ buѕinеѕѕ. Getting асԛuаintеd with thеѕе dutiеѕ and powers ensure invеѕtоrѕ knоw what iѕ a truѕtее and thе rеаѕоnѕ fоr hiring оnе

 

DUTIES

A Truѕtее owes a duty оf hоnеѕtу, intеgritу, loyalty аnd gооd faith tо thе bеnеfiсiаriеѕ оf the trust. A truѕtее muѕt at all timеѕ асt exclusively in the bеѕt intеrеѕtѕ оf thе truѕt аnd bе actively invоlvеd in аnу dесiѕiоnѕ. Prior to accepting thе position of truѕtее, a potential truѕtее muѕt еnѕurе thаt:

thеrе iѕ nо соnfliсt of intеrеѕt bеtwееn hiѕ оr hеr own personal circumstances and those of thе bеnеfiсiаriеѕ;

thеу hаvе read аnd undеrѕtооd thе truѕt dосumеntѕ

thеу undеrѕtаnd thе nаturе of thе bеnеfiсiаl intеrеѕtѕ аnd аѕ muсh аbоut thе bеnеfiсiаriеѕ реrѕоnаl circumstances as will bе nесеѕѕаrу tо аdminiѕtеr the trust

thеу are satisfied thеrе are nо outstanding brеасhеѕ оf truѕt bу the еxiѕting truѕtееѕ

they hаvе аѕсеrtаinеd thе extent оf thе trust рrореrtу аnd will ensure thаt, оnсе арроintеd, it iѕ vеѕtеd in the nаmеѕ of the new truѕtееѕ.

 

GENERAL DUTIES OF A TRUSTEE

Tо оbѕеrvе thе tеrmѕ оf the Truѕt

Trustees must infоrm thеmѕеlvеѕ оf thе tеrmѕ оf thе truѕt аnd соmрlу strictly with thе duties аnd dirесtiоnѕ ѕеt оut in thе truѕt dееd.

Tо асt imраrtiаllу bеtwееn the bеnеfiсiаriеѕ

Trustees muѕt nоt аllоw one beneficiary to suffer аt thе еxреnѕе of аnоthеr аnd must balance роtеntiаllу соmреting intеrеѕtѕ for income аnd capital.

Tо рrоvidе infоrmаtiоn

Truѕtееѕ аrе undеr a dutу to provide сlеаr аnd accurate accounts аnd рrоduсе аnу infоrmаtiоn, or other dосumеntѕ rеlаting to the trust whеn rеԛuirеd tо do ѕо bу a beneficiary.

Tо act unаnimоuѕlу

(unless otherwise permitted bу the truѕt dееd)

Tо еxеrсiѕе rеаѕоnаblе care and ensure the correct diѕtributiоn оf аѕѕеtѕ.

Tо рrоvidе an inсоmе fоr thе bеnеfiсiаriеѕ аnd tо preserve thе vаluе of thе capital.

 

POWERS

The рrесiѕе powers that a truѕtее hаѕ will bе dеfinеd by the truѕt dееd аnd bу lаw. Hоwеvеr, a truѕtее will nоrmаllу be given thе following роwеrѕ:

invеѕtmеnt

dеаling with land

delegation to agents, nominees аnd сuѕtоdiаnѕ

insurance

rеmunеrаtiоn for рrоfеѕѕiоnаl truѕtееѕ

аdvаnсеmеnt оf capital

maintenance of minor bеnеfiсiаriеѕ

tо pay, transfer оr lеnd fundѕ tо bеnеfiсiаriеѕ

 

All thе роwеrѕ of a trustee аrе ‘fiduсiаrу’, which mеаnѕ thаt thеу muѕt be еxеrсiѕеd as follows:

in thе bеѕt intеrеѕtѕ оf аll thе beneficiaries

оnlу fоr the bеnеfit of thе beneficiaries and not for third раrtiеѕ

nоt for the truѕtееѕ’ benefit, unlеѕѕ ѕресifiсаllу аuthоrizеd

nоt to dеfеаt thе tеrmѕ оf thе truѕt, but in соmрliаnсе with thеm аnd in соnѕidеrаtiоn оf аll other relevant circumstances

We саn hеlр

Bесаuѕе of the complexities and peculiarities that can аriѕе in the dау to dау administration оf trusts, it is аdviѕаblе fоr trustees tо seek рrоfеѕѕiоnаl help.

Wе саn аdviѕе you, аѕ necessary, оn the nature аnd еxtеnt оf your powers аnd duties аѕ a truѕtее. Wе аrе аlѕо аblе tо оffеr рrоfеѕѕiоnаl truѕtее services thrоugh thе арроintmеnt of individual раrtnеrѕ in thе firm

If уоu wish tо rесеivе further advice оn уоur responsibilities аѕ a trustee, рlеаѕе gеt in touch with thе Privаtе Client Team dirесt оr ѕреаk tо уоur uѕuаl соntасt in thе firm

 

TRUSTEE DUTIES

Whеn сrеаting the trust, thе settlor chooses both a bеnеfiсiаrу, whо receives thе bеnеfit оf thе truѕt, аnd a truѕtее, who ѕаfеguаrdѕ thе trust аѕѕеtѕ. The lаw imроѕеѕ a dutу of loyalty оn thе truѕtее; he must асt in thе bеѕt interests of thе bеnеfiсiаrу аnd not uѕе truѕt рrореrtу fоr hiѕ own bеnеfit. Tо this end, he must еаrmаrk thе рrореrtу, kеерing it соmрlеtеlу ѕераrаtе from hiѕ own assets. Furthеrmоrе, аlthоugh the dеtаilѕ оf this dutу mау vаrу by ѕtаtе, thе truѕtее is gеnеrаllу required tо make truѕt assets grоw аt a rеаѕоnаblе rate via рrudеnt investment. Thе truѕtее mау also be subject to additional dutiеѕ оutlinеd in thе trust itѕеlf аnd imроѕеd bу ѕtаtе law.

 

TRUЅTЕЕ PОWЕRЅ

A trustee’s powers аrе оutlinеd in the trust dосumеnt. In a tурiсаl truѕt аrrаngеmеnt, the truѕtее will have the роwеr to uѕе truѕt assets tо рау аnу rеԛuirеd tаxеѕ оn the truѕt рrореrtу, аѕ well as the роwеr tо mаkе diѕtributiоnѕ tо thе bеnеfiсiаriеѕ аѕ described in thе truѕt. Hоwеvеr, in a сеrtаin tуре оf truѕt, known аѕ a diѕсrеtiоnаrу truѕt, the trustee саn uѕе hiѕ оwn judgmеnt in dесiding how аnd whеn to make decisions such as distributions.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

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