Not sure which one is right for you? An irrevocable trust family trusts explained an arrangement whereby a grantor relinquishes legal ownership of property and places it under the administration of a trustee, who administers it for the benefit of the trust beneficiaries. A family trust is a trust in which the beneficiaries are all relatives of the grantor. A grantor creates a trust deed by drafting a deed of trust and signing it.
Revocability In most states, a trust is presumed to be revocable unless the trust deed specifically states that it is irrevocable. Since the assets of a revocable trust can be reached by your creditors, it is important to state that the trust is irrevocable. It is acceptable to name yourself as a beneficiary. Assets may be distributed to beneficiaries in lump sum, through regular periodic payments, or at the discretion of the trustee. The Trustee The trust deed should appoint a trustee and an alternate trustee, after you obtain their consent to the appointments. A trustee may be an individual or a company, such as a bank or a trust company.
The disadvantage of using an individual as a trustee is that if the trust is set to endure for many years, the trustee will have to be changed when the original trustee dies. Assets Your creditors may attempt to reach trust assets by claiming that your transfer of assets to the trust was a fraudulent attempt to avoid your debts. Consequently, you should transfer assets to the trust in a manner that raises no doubt about the legitimacy of the transfer. How to Terminate a Living Trust Any trust that you establish during your lifetime is a “living trust.