1 00:00:00,100 --> 00:00:03,700 The law school of America. A trust is a legal relationship 2 00:00:03,700 --> 00:00:06,300 in which the legal title to property is entrusted to a 3 00:00:06,300 --> 00:00:09,500 person or legal entity with a fiduciary duty to hold and use 4 00:00:09,500 --> 00:00:12,300 it for another's benefit in the anglo-american. 5 00:00:12,300 --> 00:00:15,400 Common law the party who in trusts the property is known as 6 00:00:15,400 --> 00:00:18,500 the settler the party to whom the property is entrusted is 7 00:00:18,500 --> 00:00:21,700 known as the trustee the party for whose benefit the property 8 00:00:21,700 --> 00:00:24,900 is entrusted, is known as the beneficiary and the entrusted 9 00:00:24,900 --> 00:00:28,300 property itself is known as the Corpus or trust property with a 10 00:00:28,300 --> 00:00:31,900 strategic and legal use of Rusts individuals can ensure that 11 00:00:31,900 --> 00:00:35,200 their children and grandchildren or chosen beneficiaries are able 12 00:00:35,200 --> 00:00:37,100 to benefit completely from The Inheritance. 13 00:00:37,100 --> 00:00:39,500 They want them to receive a testamentary. 14 00:00:39,500 --> 00:00:42,400 Trust is created by a will and arises after the death of the 15 00:00:42,400 --> 00:00:45,000 settler. An inter vivos trust is created 16 00:00:45,000 --> 00:00:47,800 during the settlers Lifetime by a trust instrument. 17 00:00:48,000 --> 00:00:51,100 A trust, maybe revocable or irrevocable in the United 18 00:00:51,100 --> 00:00:53,100 States. A trust is presumed to be a 19 00:00:53,100 --> 00:00:56,000 revocable unless the instrument or will creating it states, it 20 00:00:56,000 --> 00:00:59,900 is revocable except in California, Oklahoma and Texas. 21 00:01:00,000 --> 00:01:03,000 Is in which trusts are presumed to be revocable, unless the 22 00:01:03,000 --> 00:01:04,800 instrument or will creating them States. 23 00:01:04,800 --> 00:01:06,900 They are a revocable and irrevocable. 24 00:01:06,900 --> 00:01:10,600 Trust can be broken, revoked only by a Judicial proceeding. 25 00:01:10,900 --> 00:01:14,000 The trustee is the legal owner of the property in trust, as 26 00:01:14,000 --> 00:01:17,600 fiduciary for the beneficiary or beneficiaries, who is /. 27 00:01:17,600 --> 00:01:19,900 Are the Equitable owners of the trust property. 28 00:01:20,100 --> 00:01:23,300 Trustees does have a fiduciary duty to manage the trust of the 29 00:01:23,300 --> 00:01:26,700 benefit of the Equitable owners. They must provide a regular 30 00:01:26,700 --> 00:01:29,800 accounting of trust income and expenditures Trust. 31 00:01:29,900 --> 00:01:33,100 These may be compensated and be reimbursed their expenses. 32 00:01:33,300 --> 00:01:35,700 A court of competent jurisdiction, can remove a 33 00:01:35,708 --> 00:01:38,600 trustee, who preaches his slasher fiduciary duty. 34 00:01:38,900 --> 00:01:42,000 Some breaches of fiduciary duty can be charged and tried as 35 00:01:42,000 --> 00:01:45,700 criminal offences in a court of law, a trustee can be a natural 36 00:01:45,700 --> 00:01:48,500 person, a business entity or a public body. 37 00:01:48,800 --> 00:01:52,100 A trust in the United States may be subject to federal and state 38 00:01:52,100 --> 00:01:55,200 taxation. A trust is created by a settler 39 00:01:55,300 --> 00:01:58,300 who transfers title to some or all of his or her property to a 40 00:01:58,300 --> 00:02:01,500 trustee who then holds. Go to that property in trust for 41 00:02:01,500 --> 00:02:03,300 the benefit of the beneficiaries. 42 00:02:03,600 --> 00:02:05,800 The trust is governed by the terms under which it was 43 00:02:05,800 --> 00:02:08,500 created. In most jurisdictions, this 44 00:02:08,500 --> 00:02:11,300 requires a contractual trust agreement or deed. 45 00:02:11,500 --> 00:02:14,400 It is possible for a single individual to assume the role of 46 00:02:14,400 --> 00:02:17,600 more than one of these parties. And for multiple individuals to 47 00:02:17,600 --> 00:02:21,000 share a single role, for example, in a living trust, it 48 00:02:21,000 --> 00:02:23,900 is common for the grantor to be both a trustee and a lifetime 49 00:02:23,900 --> 00:02:26,000 beneficiary. While naming other contingent 50 00:02:26,000 --> 00:02:29,700 beneficiaries trusts have existed since Roman times and 51 00:02:29,700 --> 00:02:32,100 have been become one of the most important Innovations in 52 00:02:32,100 --> 00:02:34,400 property. Law, trust law has evolved 53 00:02:34,400 --> 00:02:36,800 through court rulings differently in different states. 54 00:02:37,000 --> 00:02:39,800 So, statements in this article are generalizations, 55 00:02:39,800 --> 00:02:43,000 understanding the jurisdiction, specific case law involved is 56 00:02:43,000 --> 00:02:45,700 tricky. Some US states are adapting the 57 00:02:45,700 --> 00:02:49,200 uniform, trust code to codify and harmonize their trust laws. 58 00:02:49,300 --> 00:02:53,000 But state-specific variation still remain an owner placing 59 00:02:53,000 --> 00:02:55,800 property into, trust turns over part of his or her bundle of 60 00:02:55,800 --> 00:02:59,500 rights to the trustee separating the properties legal ownership 61 00:02:59,500 --> 00:03:02,300 and From its Equitable ownership and benefits. 62 00:03:02,600 --> 00:03:05,600 This may be done for tax reasons or to control the property and 63 00:03:05,600 --> 00:03:07,900 its benefits. If the settler is absent 64 00:03:07,900 --> 00:03:11,800 incapacitated, or deceased testamentary, trusts may be 65 00:03:11,800 --> 00:03:14,900 created in Wills, defining how money and property will be 66 00:03:14,900 --> 00:03:17,300 handled for children or other beneficiaries. 67 00:03:17,600 --> 00:03:20,900 While the trustee is given legal title to the trust property in 68 00:03:20,900 --> 00:03:23,000 accepting title. The trustee owes a number of 69 00:03:23,000 --> 00:03:25,400 fiduciary duties to the beneficiaries. 70 00:03:25,700 --> 00:03:28,900 The primary duties owed are those of loyalty prudence and 71 00:03:28,900 --> 00:03:32,600 impartiality The trustees may be held to a very high standard of 72 00:03:32,600 --> 00:03:35,500 care in their dealings to enforce their behavior to 73 00:03:35,500 --> 00:03:37,100 ensure. Beneficiaries receive. 74 00:03:37,100 --> 00:03:40,700 Their do trustees are subject to a number of ancillary duties in 75 00:03:40,700 --> 00:03:44,300 support of the primary duties, including duties of openness and 76 00:03:44,300 --> 00:03:48,100 transparency, and duties of record-keeping accounting and 77 00:03:48,100 --> 00:03:51,000 disclosure. In addition, a trustee has a 78 00:03:51,000 --> 00:03:54,600 duty to know, understand and abide by the terms of the trust 79 00:03:54,600 --> 00:03:57,600 and relevant law. The trustee may be compensated 80 00:03:57,600 --> 00:04:00,800 and have expenses reimbursed but otherwise Eyes must turn over 81 00:04:00,800 --> 00:04:02,700 all profits from the trust properties. 82 00:04:02,700 --> 00:04:05,700 In neither in debt nor riskily speculate on the trust assets 83 00:04:05,700 --> 00:04:08,400 without the written clear permission of all of the adult 84 00:04:08,400 --> 00:04:11,100 beneficiaries. There are strong restrictions 85 00:04:11,100 --> 00:04:14,300 regarding a trustee with a conflict of interest courts. 86 00:04:14,300 --> 00:04:18,100 Can reverse a trustees actions order profits returned and 87 00:04:18,100 --> 00:04:21,200 impose other sanctions if they find a trustee has failed in any 88 00:04:21,200 --> 00:04:24,300 of his or her duties. Such a failure is a civil breach 89 00:04:24,300 --> 00:04:27,000 of trust, and can leave a neglectful or dishonest trustee 90 00:04:27,000 --> 00:04:29,200 with severe liabilities for the breach. 91 00:04:29,500 --> 00:04:32,400 It is highly advisable for settlers and in many cases 92 00:04:32,400 --> 00:04:36,400 trustees to seek qualified legal counsel advice before entering 93 00:04:36,400 --> 00:04:38,100 into, or creating a trust agreement. 94 00:04:38,100 --> 00:04:40,900 And trustees must take great care in acting or omitting to 95 00:04:40,900 --> 00:04:43,700 act, to avoid unlawful mistakes history. 96 00:04:44,000 --> 00:04:47,700 English common law, Roman law had a well-developed concept of 97 00:04:47,700 --> 00:04:50,900 the trust. 50 comma. Some in terms of testamentary 98 00:04:50,900 --> 00:04:53,900 trusts created by Wolves but never developed the concept of 99 00:04:53,900 --> 00:04:57,400 the inter vivos living trusts which apply while the Creator 100 00:04:57,400 --> 00:04:59,800 lives, this was created by later. 101 00:05:00,000 --> 00:05:03,800 Jurisdictions, personal trust law developed in England at the 102 00:05:03,800 --> 00:05:06,600 time of the Crusades during the 12th and 13th. 103 00:05:06,600 --> 00:05:10,600 Centuries in medieval English, trust law, the settler was known 104 00:05:10,600 --> 00:05:13,600 as the pfeffer to uses while the trustee was known as the fee off 105 00:05:13,600 --> 00:05:16,100 E2 uses. And the beneficiary was known as 106 00:05:16,100 --> 00:05:20,300 the cestui que use or cestui que trust at the time. 107 00:05:20,500 --> 00:05:24,000 Land ownership in England was based on the feudal system, when 108 00:05:24,000 --> 00:05:26,900 a landowner left England to fight in the Crusades, he 109 00:05:26,900 --> 00:05:30,000 conveyed ownership of his lands in his absence to manage the the 110 00:05:30,000 --> 00:05:31,500 estate and pay and receive feudal. 111 00:05:31,500 --> 00:05:34,400 Dues on the understanding that the ownership would be conveyed 112 00:05:34,400 --> 00:05:37,500 back on his return. However, Crusaders often 113 00:05:37,500 --> 00:05:40,900 encountered refusal to hand over the property upon their return. 114 00:05:41,200 --> 00:05:44,600 Unfortunately, for the Crusader English, common law did not 115 00:05:44,600 --> 00:05:47,500 recognize his claim as far as the king's courts. 116 00:05:47,500 --> 00:05:50,600 Were concerned, the land, belonged to the trustee, who is 117 00:05:50,600 --> 00:05:52,600 under no obligation to return it. 118 00:05:52,900 --> 00:05:56,400 The Crusader had no legal claim. The disgruntled Crusader would 119 00:05:56,400 --> 00:05:59,500 then petition the king who would refer the matter to his Lord. 120 00:05:59,900 --> 00:06:02,300 Are the Lord Chancellor could decide a case? 121 00:06:02,300 --> 00:06:05,800 According to his conscience, at this time, the principle of 122 00:06:05,800 --> 00:06:08,800 equity was born, the Lord Chancellor would consider it 123 00:06:08,800 --> 00:06:11,600 unconscionable that the legal owner could go back on his word 124 00:06:11,600 --> 00:06:14,300 and deny the claims of the Crusader, the true owner, 125 00:06:14,600 --> 00:06:18,000 therefore, he would find in favor of the returning Crusader 126 00:06:18,300 --> 00:06:20,500 over time. It became known that the Lord 127 00:06:20,500 --> 00:06:23,200 Chancellor's Court. The Court of Chancery would 128 00:06:23,200 --> 00:06:25,600 continually recognize the claim of the returning. 129 00:06:25,600 --> 00:06:28,800 Crusader, the legal owner would hold the land for the benefit of 130 00:06:28,808 --> 00:06:31,100 the original owner. And would be compelled to convey 131 00:06:31,100 --> 00:06:33,800 it back to him. When requested, the Crusader was 132 00:06:33,800 --> 00:06:36,800 the beneficiary, and the acquaintances, the trustee the 133 00:06:36,800 --> 00:06:40,100 term use of land was coined and in time developed into what we 134 00:06:40,100 --> 00:06:43,000 now know. As a trust significance, the 135 00:06:43,000 --> 00:06:46,300 trust is widely considered to be the most Innovative contribution 136 00:06:46,300 --> 00:06:50,300 of the English legal system. Today trusts play a significant 137 00:06:50,300 --> 00:06:53,600 role in most common law systems and their success has led some 138 00:06:53,600 --> 00:06:56,500 civil law jurisdictions to incorporate trust into their 139 00:06:56,500 --> 00:06:59,700 civil codes. In Curacao, for example, the 140 00:06:59,900 --> 00:07:03,100 This was enacted into law on January 1st 2012. 141 00:07:03,200 --> 00:07:05,100 However The Cure's House of a code. 142 00:07:05,100 --> 00:07:08,000 Only allows Express trusts constituted by notarial 143 00:07:08,000 --> 00:07:10,700 instruments. France has recently added a 144 00:07:10,700 --> 00:07:13,500 similar Roman law based device to its own law. 145 00:07:13,500 --> 00:07:16,100 With the fiduciary amended in 2009. 146 00:07:16,100 --> 00:07:19,500 The fiduciary unlike a trust is a contractual relationship. 147 00:07:20,400 --> 00:07:23,700 Trusts are widely used internationally, especially in 148 00:07:23,700 --> 00:07:27,000 countries within the English law sphere of influence and whilst 149 00:07:27,000 --> 00:07:29,300 most civil law jurisdictions, do not generally. 150 00:07:29,800 --> 00:07:32,700 When the concept of a trust within their legal systems, they 151 00:07:32,700 --> 00:07:35,600 do recognize the concept under the Hague convention on the law 152 00:07:35,600 --> 00:07:38,800 applicable to trust in on their recognition, partly, only the 153 00:07:38,800 --> 00:07:41,800 extent that they are parties there to the Hague convention. 154 00:07:41,800 --> 00:07:45,500 Also, regulates conflict of trusts although trusts are often 155 00:07:45,500 --> 00:07:48,200 associated with inter-family wealth transfers. 156 00:07:48,300 --> 00:07:51,300 They have become very important in American Capital markets, 157 00:07:51,400 --> 00:07:54,500 particularly through Pension funds in certain countries. 158 00:07:54,500 --> 00:07:59,700 Essentially always trusts and mutual funds often, trusts basic 159 00:07:59,800 --> 00:08:03,900 This property of any sort may be held in a trust, the use of 160 00:08:03,900 --> 00:08:06,600 trusts are many and varied for both personal and Commercial 161 00:08:06,600 --> 00:08:09,900 reasons and trusts May provide benefits in estate planning 162 00:08:09,900 --> 00:08:14,500 asset protection and taxes. Living trust may be created 163 00:08:14,500 --> 00:08:17,200 during a person's life, through the drafting of a trust 164 00:08:17,200 --> 00:08:20,500 instrument or after death in a will in a relevant sense. 165 00:08:20,500 --> 00:08:23,600 A trust can be viewed as a generic form of a corporation 166 00:08:23,600 --> 00:08:25,800 where the settlers investors are. 167 00:08:25,800 --> 00:08:29,200 Also the beneficiaries. This is particularly evident in 168 00:08:29,200 --> 00:08:31,300 the Delaware. R business trust which could 169 00:08:31,300 --> 00:08:34,500 theoretically with a language in the governing instrument the 170 00:08:34,500 --> 00:08:36,799 organized as a Cooperative Corporation or a limited 171 00:08:36,808 --> 00:08:40,000 liability Corporation. Although traditionally the 172 00:08:40,000 --> 00:08:42,900 Massachusetts business, trust has been commonly used in the 173 00:08:42,900 --> 00:08:46,700 u.s. one of the most significant aspects of trusts is the ability 174 00:08:46,700 --> 00:08:50,200 to partition and shield assets from the trustee, multiple 175 00:08:50,200 --> 00:08:52,800 beneficiaries and their respective creditors, 176 00:08:52,800 --> 00:08:56,300 particularly the trustees creditors, making it bankruptcy 177 00:08:56,300 --> 00:08:59,800 remote and leading to its use in pensions mutual funds. 178 00:09:00,100 --> 00:09:03,200 And asset securitization as well, protection of individual 179 00:09:03,200 --> 00:09:07,200 spendthrifts through the spendthrift, trust terminology a 180 00:09:07,200 --> 00:09:09,000 pointer. This is the person who can 181 00:09:09,000 --> 00:09:11,700 appoint a new trustee, or remove an existing one. 182 00:09:12,000 --> 00:09:15,900 This person is usually mentioned in the trust deed appointment in 183 00:09:15,900 --> 00:09:18,500 trust law appointment often has its everyday. 184 00:09:18,500 --> 00:09:22,100 Meaning it is common to talk of the appointment of a trustee. 185 00:09:22,100 --> 00:09:26,300 For example, however appointment also has a technical, trust law, 186 00:09:26,300 --> 00:09:31,200 meaning either the act of appointing for Example giving an 187 00:09:31,200 --> 00:09:33,400 asset from the trust to a beneficiary. 188 00:09:33,400 --> 00:09:36,300 Usually where there is some choice in the matter such as in 189 00:09:36,300 --> 00:09:40,400 a discretionary trust or the name of the document which gives 190 00:09:40,400 --> 00:09:43,900 effect to the appointment, the trustees right to do this where 191 00:09:43,900 --> 00:09:46,600 it exists is called a power of appointment. 192 00:09:46,900 --> 00:09:50,200 Sometimes a power of appointment is given to someone other than 193 00:09:50,200 --> 00:09:54,400 the trustee such as the settler, The Protector or a beneficiary 194 00:09:54,700 --> 00:09:58,300 as trustee for ATF. This is the legal term used to 195 00:09:58,308 --> 00:10:00,800 imply. That an entity is a As a trustee 196 00:10:01,100 --> 00:10:04,800 beneficiary a beneficiary, is anyone who receives benefits 197 00:10:04,800 --> 00:10:07,500 from any assets? The trust owns in its own 198 00:10:07,500 --> 00:10:10,900 capacity. Ioc this term refers to the fact 199 00:10:10,900 --> 00:10:14,200 that the trustees acting on its own behalf protector. 200 00:10:14,300 --> 00:10:18,300 A protector may be appointed in an Express, inter vivos trust as 201 00:10:18,300 --> 00:10:21,400 a person who has some control over the trustee usually 202 00:10:21,400 --> 00:10:23,900 including a power to dismiss the trustee and appoint. 203 00:10:23,900 --> 00:10:27,400 Another the legal status of a protector is the subject of some 204 00:10:27,400 --> 00:10:29,600 debate. No one doubts that a trustee has 205 00:10:29,800 --> 00:10:33,300 Fiduciary responsibilities. If a protector also has 206 00:10:33,300 --> 00:10:36,900 fiduciary responsibilities, then the courts if asked, by 207 00:10:36,900 --> 00:10:40,200 beneficiaries could order him or her to act in the way the court 208 00:10:40,200 --> 00:10:42,700 decrees. However, a protector is 209 00:10:42,700 --> 00:10:44,800 unnecessary to the nature of a trust. 210 00:10:44,800 --> 00:10:47,200 Many trusts can in to operate without one. 211 00:10:47,400 --> 00:10:50,500 Also, protectors are comparatively new while the 212 00:10:50,500 --> 00:10:53,000 nature of trusts has been established over hundreds of 213 00:10:53,000 --> 00:10:55,200 years. It is therefore thought by some 214 00:10:55,200 --> 00:10:58,400 that protectors have fiduciary duties and by others that they 215 00:10:58,400 --> 00:11:01,300 do, not the case. Law has not yet established this 216 00:11:01,300 --> 00:11:05,900 point settlers this is the person or persons who creates 217 00:11:05,900 --> 00:11:08,600 the trust grantors is a common synonym. 218 00:11:08,900 --> 00:11:11,700 Terms of the trust means the settlers wishes expressed in the 219 00:11:11,700 --> 00:11:14,400 trust instrument. Trust, eat a trust. 220 00:11:14,400 --> 00:11:17,100 Deed is a legal document that defines the trust such as the 221 00:11:17,100 --> 00:11:21,200 trustee beneficiaries settler in a pointer and the terms and 222 00:11:21,200 --> 00:11:24,800 conditions of the agreement, trust distributions, a trust 223 00:11:24,800 --> 00:11:27,800 distribution is any income, or asset that is given out to the 224 00:11:27,800 --> 00:11:32,000 beneficiaries of the trust. Trustee a person, either an 225 00:11:32,000 --> 00:11:35,300 individual, a corporation or more than one of either, who 226 00:11:35,300 --> 00:11:38,900 administers a trust a trustee is considered a fiduciary. 227 00:11:38,900 --> 00:11:41,900 And O's, the highest Duty under the law to protect trust assets 228 00:11:41,900 --> 00:11:45,700 from unreasonable loss for the trust's beneficiaries creation. 229 00:11:46,000 --> 00:11:48,800 Trusts may be created by the expressed intentions of the 230 00:11:48,800 --> 00:11:52,800 settler Express trusts, or they may be created by operation of 231 00:11:52,800 --> 00:11:56,100 law known as implied. Trusts an implied trust is one 232 00:11:56,100 --> 00:11:59,300 created by a court of equity because of Acts or situations of 233 00:11:59,300 --> 00:12:02,900 the Is implied trusts are divided into two categories 234 00:12:03,000 --> 00:12:06,500 resulting in constructive. A resulting trust is implied by 235 00:12:06,500 --> 00:12:09,700 the law to work out the presumed intentions of the parties but it 236 00:12:09,700 --> 00:12:11,300 does not take into consideration. 237 00:12:11,300 --> 00:12:14,500 Their expressed intent a constructive trust is a trust 238 00:12:14,500 --> 00:12:17,300 implied by law to work out Justice between the parties 239 00:12:17,500 --> 00:12:20,900 regardless of their intentions. Common ways in which a trust is 240 00:12:20,900 --> 00:12:25,500 created include one a written trust instrument created by the 241 00:12:25,500 --> 00:12:27,200 settler in signed by both the settler. 242 00:12:27,200 --> 00:12:30,600 And the trustees often referred to as an Inter vivos or living 243 00:12:30,600 --> 00:12:35,700 trust to an oral declaration or promise three-point, the will of 244 00:12:35,708 --> 00:12:40,800 a decedent, usually called a testamentary trust or for a 245 00:12:40,800 --> 00:12:43,000 court order. For example, in family 246 00:12:43,000 --> 00:12:46,600 proceedings, in some jurisdictions, certain types of 247 00:12:46,600 --> 00:12:49,200 assets, may not be the subject of a trust without a written 248 00:12:49,200 --> 00:12:53,500 document formalities the formalities required of a trust. 249 00:12:53,500 --> 00:12:57,300 Depends on the type of trust in question generally a private 250 00:12:57,300 --> 00:13:00,600 Express trust requires three elements to Certain which 251 00:13:00,600 --> 00:13:03,900 together are known as the three certainties these elements were 252 00:13:03,900 --> 00:13:07,500 determined in night, be night to be intention subject matter and 253 00:13:07,500 --> 00:13:09,700 objects. The certainty of intention 254 00:13:09,700 --> 00:13:12,600 allows the court to ascertain. A settlers true reason for 255 00:13:12,600 --> 00:13:15,800 creating the trust the certainties of subject matter in 256 00:13:15,800 --> 00:13:18,200 objects, allow the court to administer trust when the 257 00:13:18,200 --> 00:13:21,200 trustees fail to do. So the court determines whether 258 00:13:21,200 --> 00:13:24,000 there is sufficient, certainty, by construing the words used in 259 00:13:24,000 --> 00:13:26,600 the trust instrument. These words are construed 260 00:13:26,600 --> 00:13:29,600 objectively in a reasonable meaning within the context. 261 00:13:29,700 --> 00:13:33,200 Out of the entire instrument, despite intention being integral 262 00:13:33,200 --> 00:13:36,700 to express trusts, the court will try not to let trust fail 263 00:13:36,700 --> 00:13:41,000 for the lack of certainty. One intention a mere expression 264 00:13:41,000 --> 00:13:44,200 of hope that a trustee created does not constitute an intention 265 00:13:44,200 --> 00:13:48,300 to create a trust conversely. The existence of terms of art or 266 00:13:48,300 --> 00:13:51,100 the word trust does not indicate whether an instrument is an 267 00:13:51,100 --> 00:13:53,600 Express trust disputes in this area. 268 00:13:53,600 --> 00:13:58,100 Mainly concerns differentiating gifts from trusts to subject 269 00:13:58,100 --> 00:14:00,900 matter the property. Check to the trust, must be 270 00:14:00,900 --> 00:14:05,300 clearly identified Palmer V Simmons one may not for example 271 00:14:05,300 --> 00:14:09,100 State settle the majority of my estate as the precise extent 272 00:14:09,100 --> 00:14:12,200 cannot be ascertained. Trust property may be any form 273 00:14:12,200 --> 00:14:15,900 of specific property, be it real or personal tangible or 274 00:14:15,900 --> 00:14:19,300 intangible. It is often for example, real 275 00:14:19,300 --> 00:14:25,100 estate shares or cash three objects the beneficiaries of the 276 00:14:25,100 --> 00:14:28,700 trust must be clearly identified or at least be ascertainable. 277 00:14:28,900 --> 00:14:32,500 Re Haynes said, Settlement in the case of discretionary trusts 278 00:14:32,500 --> 00:14:35,600 where the trustees have power to decide who the beneficiaries 279 00:14:35,600 --> 00:14:38,500 will be the settler, must have described a clear class of 280 00:14:38,500 --> 00:14:43,000 beneficiaries mcphail V, Doulton beneficiaries may include people 281 00:14:43,000 --> 00:14:44,800 not born at the date of the trust. 282 00:14:44,800 --> 00:14:48,600 For example, my future grandchildren alternatively. 283 00:14:48,700 --> 00:14:51,600 The object of a trust could be a charitable purpose, rather than 284 00:14:51,600 --> 00:14:55,700 specific beneficiaries trustees, a trust may have multiple 285 00:14:55,700 --> 00:14:59,100 trustees and these trustees are the legal owners of the trust's 286 00:14:59,100 --> 00:15:02,500 property, Have a fiduciary duty to beneficiaries and various 287 00:15:02,500 --> 00:15:05,500 duties such as a duty of care and a duty to inform. 288 00:15:05,500 --> 00:15:08,900 If trustees do not adhere to these duties, they may be 289 00:15:08,900 --> 00:15:12,200 removed through a legal action. The trustee may be either a 290 00:15:12,200 --> 00:15:14,100 person or a legal entity such as a company. 291 00:15:14,100 --> 00:15:17,100 But typically, the trust itself is not a legal entity. 292 00:15:17,100 --> 00:15:20,400 In any litigation involving, the trust must include the trustee 293 00:15:20,400 --> 00:15:22,800 as a party. A trustee has many rights and 294 00:15:22,800 --> 00:15:25,700 responsibilities which vary based on the jurisdiction and 295 00:15:25,708 --> 00:15:29,500 Trust instrument, if a trust lacks a trustee, a court May 296 00:15:29,500 --> 00:15:31,700 appoint. Appoint, a trustee, the trustees 297 00:15:31,700 --> 00:15:33,900 administer, the Affairs, attendant to the trust. 298 00:15:33,900 --> 00:15:36,400 The trust's Affairs, may include prudently. 299 00:15:36,400 --> 00:15:39,300 Investing the assets of the trust accounting for and 300 00:15:39,300 --> 00:15:42,900 Reporting periodically to the beneficiaries filing required 301 00:15:42,900 --> 00:15:47,100 tax returns and other duties in some cases dependent upon the 302 00:15:47,100 --> 00:15:49,800 trust instrument, the trustees must make discretionary 303 00:15:49,800 --> 00:15:52,700 decisions as to, whether beneficiaries should receive 304 00:15:52,700 --> 00:15:56,200 trust assets for their benefit. A trustee may be held personally 305 00:15:56,200 --> 00:15:59,400 liable for problems. Although fiduciary liability. 306 00:15:59,700 --> 00:16:02,000 The insurance similar to directors and officers, 307 00:16:02,000 --> 00:16:04,300 liability insurance can be purchased. 308 00:16:04,600 --> 00:16:06,900 For example, a trustee could be liable. 309 00:16:06,900 --> 00:16:10,800 If assets are not properly invested, in addition a trustee 310 00:16:10,800 --> 00:16:13,300 may be liable to, its beneficiaries even where the 311 00:16:13,300 --> 00:16:16,400 trust has made a profit, but consent has not been given 312 00:16:16,800 --> 00:16:20,100 however, in the United States similar to directors and 313 00:16:20,100 --> 00:16:23,800 officers and exculpatory Clause, May minimize liability. 314 00:16:23,900 --> 00:16:26,500 Although this was previously held to be against public 315 00:16:26,500 --> 00:16:29,400 policy. This position has changed in the 316 00:16:29,600 --> 00:16:32,400 Knighted states, the uniform. Trust code provides for 317 00:16:32,400 --> 00:16:35,300 reasonable compensation and reimbursement, for trustees 318 00:16:35,300 --> 00:16:38,800 subject, to review by courts. Although trustees may be unpaid 319 00:16:39,100 --> 00:16:42,100 commercial Banks acting as trustees typically charge about 320 00:16:42,100 --> 00:16:45,700 one percent of assets under management beneficiaries. 321 00:16:46,000 --> 00:16:50,000 The beneficiaries are beneficial or Equitable owners of the trust 322 00:16:50,000 --> 00:16:52,700 property, either immediately or eventually. 323 00:16:52,800 --> 00:16:56,000 The beneficiaries will receive income from the trust property 324 00:16:56,100 --> 00:16:58,100 or they will receive the property itself. 325 00:16:58,400 --> 00:17:01,600 The extent of a Aries, interest depends on the wording of the 326 00:17:01,600 --> 00:17:04,800 trust document. One beneficiary, may be entitled 327 00:17:04,800 --> 00:17:08,700 to income, for example, interest from a bank account, whereas 328 00:17:08,700 --> 00:17:11,599 another may be entitled to the entirety of the trust property 329 00:17:11,599 --> 00:17:15,200 when he attains the age of 25 years, the settler has much 330 00:17:15,200 --> 00:17:18,000 discretion when creating the trust subject to some 331 00:17:18,000 --> 00:17:21,599 limitations, imposed by law. The use of trusts as a means to 332 00:17:21,599 --> 00:17:24,400 inherit substantial wealth. May be associated with some 333 00:17:24,400 --> 00:17:27,599 negative connotations, some beneficiaries, who are able to 334 00:17:27,599 --> 00:17:30,200 live comfortably from trust precedes with, Without having to 335 00:17:30,200 --> 00:17:32,300 work a job. Maybe jokingly referred to as 336 00:17:32,300 --> 00:17:36,200 trust fund babies, regardless of age or trustafarian 's. 337 00:17:36,500 --> 00:17:39,900 And now a word from our sponsor, the Louis School of America 338 00:17:40,000 --> 00:17:44,300 purposes, common purposes for trusts include employee 339 00:17:44,300 --> 00:17:47,400 ownership shares in a company may be held by the trustee of an 340 00:17:47,400 --> 00:17:50,100 employee. Trust often indefinitely, as 341 00:17:50,100 --> 00:17:53,500 part of the employee ownership of that company employee, share 342 00:17:53,500 --> 00:17:55,900 ownership shares. In a company, may be helped by 343 00:17:55,900 --> 00:17:59,000 the trustee of an employee trust as part of an employee share or 344 00:17:59,000 --> 00:18:03,800 share, Plan privacy, trusts may be created purely for privacy. 345 00:18:04,100 --> 00:18:06,900 The terms of the will are public in certain jurisdictions. 346 00:18:07,000 --> 00:18:09,700 While the terms of a trust are not spendthrift. 347 00:18:09,700 --> 00:18:13,000 Clauses, trusts may be used to protect beneficiaries. 348 00:18:13,100 --> 00:18:16,600 For example, once children against their own inability to 349 00:18:16,600 --> 00:18:19,400 handle money, these are especially attractive for 350 00:18:19,400 --> 00:18:22,300 spendthrifts courts. May generally recognized 351 00:18:22,300 --> 00:18:25,200 spendthrift Clauses against rust beneficiaries and their 352 00:18:25,200 --> 00:18:28,700 creditors, but not against creditors of a settler Wilson, 353 00:18:28,700 --> 00:18:31,200 estate planning. She trusts frequently appear in 354 00:18:31,200 --> 00:18:33,600 Wales. Indeed, technically, the 355 00:18:33,600 --> 00:18:36,200 administration of every deceased's estate is a form of 356 00:18:36,200 --> 00:18:39,500 trust conventional Wills. Typically leave assets to the 357 00:18:39,500 --> 00:18:43,600 deceased spouse, if any and then to the children, equally if the 358 00:18:43,600 --> 00:18:46,900 children are under 18 or under some other age mentioned in the 359 00:18:46,900 --> 00:18:51,300 will 21 and 25 are common. A trust must come into existence 360 00:18:51,300 --> 00:18:53,400 until the contingency age has reached. 361 00:18:53,700 --> 00:18:57,300 The executor of the will is usually the trustee and the 362 00:18:57,300 --> 00:19:00,700 children are the beneficiaries. The Di will have powers to 363 00:19:00,700 --> 00:19:04,600 assist the beneficiaries during their minority charities, in 364 00:19:04,600 --> 00:19:07,500 some common law jurisdictions. All Charities, must take the 365 00:19:07,500 --> 00:19:11,300 form of trusts in others, corporations may be Charities. 366 00:19:11,300 --> 00:19:15,300 Also in most jurisdictions Charities are tightly regulated 367 00:19:15,300 --> 00:19:17,500 for the public benefit in England. 368 00:19:17,500 --> 00:19:21,500 For example, by the charity commission, unit trusts the 369 00:19:21,500 --> 00:19:24,400 trust has proved to be such a flexible concept that it has 370 00:19:24,400 --> 00:19:27,700 proved capable of working as an investment vehicle, the unit 371 00:19:27,700 --> 00:19:31,700 trust pension plan, Ann's typically set up as a trust with 372 00:19:31,700 --> 00:19:34,800 the employer is settler, and the employees and their dependents 373 00:19:34,800 --> 00:19:38,500 as beneficiaries remuneration trusts for the benefit of 374 00:19:38,500 --> 00:19:41,200 directors and employees or companies or their families or 375 00:19:41,200 --> 00:19:43,900 dependence. This form of trust was developed 376 00:19:43,900 --> 00:19:47,300 by Paul baxendale Walker and has since gained widespread use 377 00:19:47,600 --> 00:19:50,700 corporate structures complex business Arrangements. 378 00:19:50,800 --> 00:19:54,400 Most often in the finance and insurance sectors sometimes use 379 00:19:54,400 --> 00:19:57,300 trust among various other entities, for example, 380 00:19:57,500 --> 00:20:01,100 corporations in their structure. Asset protection. 381 00:20:01,200 --> 00:20:04,600 Trusts may allow beneficiaries to protect assets from creditors 382 00:20:04,600 --> 00:20:06,800 as the trust. Maybe bankruptcy remote. 383 00:20:07,100 --> 00:20:10,700 For example, a discretionary Trust of which the settler may 384 00:20:10,700 --> 00:20:13,700 be the protector and a beneficiary, but not the trustee 385 00:20:13,700 --> 00:20:16,800 and not the sole beneficiary. In such an arrangement, the 386 00:20:16,800 --> 00:20:20,200 settler may be in a position to benefit from the trust assets 387 00:20:20,200 --> 00:20:23,000 without owning them and therefore in theory protected 388 00:20:23,000 --> 00:20:25,700 from creditors. In addition, the trust may 389 00:20:25,700 --> 00:20:28,400 attempt to preserve anonymity with a completely unconnected 390 00:20:28,400 --> 00:20:32,600 name for Ample the teddy bear, trust, these strategies are 391 00:20:32,600 --> 00:20:36,000 ethically and legally controversial tax planning the 392 00:20:36,000 --> 00:20:38,000 tax consequences of doing anything. 393 00:20:38,000 --> 00:20:40,200 Using a trust are usually different from the tax 394 00:20:40,200 --> 00:20:43,900 consequences of achieving the same effect by another route if 395 00:20:44,000 --> 00:20:45,900 indeed it would be possible to do. 396 00:20:45,900 --> 00:20:50,000 So in many cases, the tax consequences of using the trust 397 00:20:50,000 --> 00:20:52,600 are better than the alternative and trusts are there for 398 00:20:52,600 --> 00:20:56,500 frequently used for legal tax, avoidance for an example, see 399 00:20:56,500 --> 00:20:59,400 the nil band discretionary trust, explained it in here. 400 00:20:59,600 --> 00:21:02,900 Tens tax. United Kingdom co-ownership 401 00:21:03,000 --> 00:21:06,000 ownership of property by more than one person is facilitated 402 00:21:06,000 --> 00:21:09,900 by a trust in particular ownership of a matrimonial home, 403 00:21:09,900 --> 00:21:12,500 is commonly affected by a trust with both Partners as 404 00:21:12,500 --> 00:21:16,000 beneficiaries in one or both owning the legal title, as 405 00:21:16,000 --> 00:21:20,000 trustee construction law in Canada and Minnesota monies, 406 00:21:20,000 --> 00:21:22,900 owed by employers to contractors or by contractors to 407 00:21:22,900 --> 00:21:26,300 subcontractors on construction projects must by law be held in 408 00:21:26,300 --> 00:21:29,400 trust, in the event of contractor and solvency. 409 00:21:29,500 --> 00:21:32,200 So this makes it much more, likely that subcontractors will 410 00:21:32,200 --> 00:21:35,800 be paid for work, completed legal retainer, lawyers, in 411 00:21:35,800 --> 00:21:38,900 certain countries often require that a legal retainer, be paid, 412 00:21:38,900 --> 00:21:42,000 upfront and held in trust until such time as the legal work is 413 00:21:42,000 --> 00:21:44,300 performed and built to the client this serves. 414 00:21:44,300 --> 00:21:47,000 As a minimum guarantee of remuneration should the client 415 00:21:47,000 --> 00:21:50,400 become insolvent. However, strict legal ethical 416 00:21:50,400 --> 00:21:54,100 codes, apply to the use of legal retainer trusts types. 417 00:21:54,400 --> 00:21:57,200 Trusts go by many different names depending on the 418 00:21:57,200 --> 00:21:59,400 characteristics or the purpose of the trust. 419 00:21:59,800 --> 00:22:02,400 Because truss often have multiple characteristics or 420 00:22:02,400 --> 00:22:05,700 purposes, a single Trust might accurately be described in 421 00:22:05,700 --> 00:22:08,800 several ways. For example, a living trust is 422 00:22:08,800 --> 00:22:12,800 often an Express trust which is also a revocable trust and might 423 00:22:12,800 --> 00:22:15,300 include an incentive trust and so forth. 424 00:22:15,600 --> 00:22:18,700 Alphabetic list of trust types, asset protection. 425 00:22:18,700 --> 00:22:22,100 Trust the concept of an asset protection, trust encompasses, 426 00:22:22,100 --> 00:22:24,700 any form of trust, that provides for funds to be held on a 427 00:22:24,708 --> 00:22:27,900 discretionary basis. Such trusts are set up in an 428 00:22:27,900 --> 00:22:31,400 attempt to avoid or mitigate the Effects of Taxation divorce and 429 00:22:31,400 --> 00:22:35,400 bankruptcy on the beneficiary. Such trust may be prescribed or 430 00:22:35,400 --> 00:22:37,800 Limited in their effect. By governments in the courts 431 00:22:38,100 --> 00:22:41,100 constructive trust. Unlike an Express, trust a 432 00:22:41,100 --> 00:22:44,100 constructive, trust is not created by an agreement between 433 00:22:44,100 --> 00:22:46,600 a settler and the trustee a constructive. 434 00:22:46,600 --> 00:22:49,300 Trust is imposed by the law as an equitable remedy. 435 00:22:49,600 --> 00:22:52,300 This generally occurs due to some wrongdoing where the 436 00:22:52,300 --> 00:22:55,300 wrongdoer has acquired legal title to some property and 437 00:22:55,300 --> 00:22:58,400 cannot in good conscience. Be allowed to benefit from it, a 438 00:22:58,400 --> 00:23:01,900 constructive Trust. Is essentially a legal fiction, 439 00:23:02,200 --> 00:23:05,900 for example, a court of equity, recognizing a plaintiffs request 440 00:23:05,900 --> 00:23:07,800 for the Equitable remedy of a constructive. 441 00:23:07,800 --> 00:23:10,100 Trust may decide that a constructive trust has been 442 00:23:10,100 --> 00:23:11,900 created. In simply order, the person 443 00:23:11,900 --> 00:23:14,300 holding the assets to deliver them, to the person who 444 00:23:14,300 --> 00:23:17,400 rightfully should have them. The constructive trustee is not 445 00:23:17,400 --> 00:23:20,200 necessarily the person who is guilty of the wrongdoing. 446 00:23:20,400 --> 00:23:23,500 And in practice, it is often a bank or similar organization. 447 00:23:23,900 --> 00:23:26,800 The distinction may be finer than the preceding Exposition in 448 00:23:26,800 --> 00:23:28,300 that. There are also said to be two 449 00:23:28,300 --> 00:23:31,100 forms of constructive. Trust the institutional 450 00:23:31,100 --> 00:23:34,300 constructive trust and the remedial constructive trust. 451 00:23:34,600 --> 00:23:37,300 The latter is an equitable remedy imposed by lobbying. 452 00:23:37,300 --> 00:23:40,600 Truly remedial the former arising due to some defect in 453 00:23:40,600 --> 00:23:44,000 the transfer of property, discretionary, trust in a 454 00:23:44,008 --> 00:23:46,800 discretionary trust. Certainty of object is 455 00:23:46,800 --> 00:23:49,500 satisfied, if it can be said that there is a Criterion, which 456 00:23:49,500 --> 00:23:52,200 a person must satisfy to be a beneficiary. 457 00:23:52,300 --> 00:23:56,000 IE, whether there is a class of beneficiaries, which a person 458 00:23:56,000 --> 00:23:59,900 can be said to belong to enact way persons, who By the 459 00:23:59,900 --> 00:24:03,300 Criterion who are members of that class can enforce, the 460 00:24:03,300 --> 00:24:08,700 trust rebounds deed trusts mcphail V Doulton directed trust 461 00:24:08,800 --> 00:24:11,400 in these types. A directed trustee is directed 462 00:24:11,400 --> 00:24:14,300 by a number of other trust. Participants in implementing the 463 00:24:14,300 --> 00:24:17,400 trust's execution. These participants may include a 464 00:24:17,400 --> 00:24:21,300 distribution committee, trust protector or investment advisor. 465 00:24:21,600 --> 00:24:24,600 The directed trustees role as administrative, which involves 466 00:24:24,600 --> 00:24:27,400 following investment instructions, holding legal 467 00:24:27,400 --> 00:24:30,600 title to the trust assets provided riding fiduciary and 468 00:24:30,600 --> 00:24:34,300 tax accounting coordinating trust participants and offering 469 00:24:34,300 --> 00:24:37,600 dispute resolution among the participants Dynasty. 470 00:24:37,600 --> 00:24:40,300 Trust, also known as a generation-skipping. 471 00:24:40,300 --> 00:24:43,400 Trust a type of trust in which assets are passed down to the 472 00:24:43,400 --> 00:24:46,900 grantors grandchildren. Not the grantors children, the 473 00:24:46,900 --> 00:24:49,800 children of the grantor, never take title to the assets. 474 00:24:50,100 --> 00:24:53,100 This allows the grantor to avoid the estate taxes that would 475 00:24:53,100 --> 00:24:55,500 apply if the assets were transferred to his or her 476 00:24:55,500 --> 00:24:57,400 children. First generation. 477 00:24:57,400 --> 00:24:59,200 Skipping. Trusts can still be used to 478 00:24:59,200 --> 00:25:01,400 provide. Financial benefits to a grantors 479 00:25:01,400 --> 00:25:03,900 children. However, because any income 480 00:25:03,900 --> 00:25:06,800 generated by the trust's assets can be made accessible to the 481 00:25:06,800 --> 00:25:09,700 grantors children while still leaving the Assets in trust for 482 00:25:09,708 --> 00:25:13,300 the grandchildren employee trust, a trust for the benefit 483 00:25:13,300 --> 00:25:16,100 of employees. A United States example is a 484 00:25:16,100 --> 00:25:19,500 trust established to operate an employee stock ownership plan 485 00:25:19,900 --> 00:25:23,200 Express, trust an Express trust arises where a settler 486 00:25:23,200 --> 00:25:26,400 deliberately and consciously decides to create a trust over 487 00:25:26,400 --> 00:25:29,100 their assets. Either now, or upon his or her 488 00:25:29,100 --> 00:25:32,900 later, Death in these cases, this will be achieved by signing 489 00:25:32,900 --> 00:25:36,300 a trust instrument which will either be a will or trust eat 490 00:25:36,500 --> 00:25:39,400 almost all trust dealt with in the trust industry are of this 491 00:25:39,400 --> 00:25:41,700 type. They contrast with resulting and 492 00:25:41,700 --> 00:25:44,600 constructive trusts the intention of the parties to 493 00:25:44,600 --> 00:25:47,400 create the trust must be shown clearly by their language or 494 00:25:47,400 --> 00:25:50,800 conduct for an Express. Trust to exist, there must be 495 00:25:50,800 --> 00:25:54,200 certainty to the objects of the trust and the trust property in 496 00:25:54,200 --> 00:25:56,400 the USA. Statute of frauds Provisions. 497 00:25:56,400 --> 00:25:58,900 Require Express trust to be evidenced in writing. 498 00:25:58,900 --> 00:26:02,200 If the Properties above a certain value or is real estate 499 00:26:02,400 --> 00:26:06,000 fix trust the entitlement of the beneficiaries is fixed by the 500 00:26:06,000 --> 00:26:10,500 settler, the trustee has little or no discretion common examples 501 00:26:10,500 --> 00:26:15,200 are a trust for a minor to X. If she attains 21 a life 502 00:26:15,200 --> 00:26:19,500 interest to pay the income to X for her lifetime, and a 503 00:26:19,500 --> 00:26:21,600 remainder to pay the capital to why. 504 00:26:21,600 --> 00:26:25,800 After the death of X, Grant or retained annuity trust, Gras. 505 00:26:25,900 --> 00:26:29,700 An irrevocable trust where by a grant or transfers assets, As a 506 00:26:29,700 --> 00:26:32,700 gift into a trust and receives an annual payment, from the 507 00:26:32,700 --> 00:26:35,300 trust for a period of time, specified in the trust 508 00:26:35,300 --> 00:26:38,900 instrument, at the end of the term, the financial property is 509 00:26:38,900 --> 00:26:42,400 transferred tax-free to the named beneficiaries. 510 00:26:42,800 --> 00:26:45,900 This trust is commonly used in the US to facilitate large 511 00:26:45,900 --> 00:26:49,400 Financial gifts that are not subject to a gift tax hybrid 512 00:26:49,400 --> 00:26:53,300 trust combines elements of both fixed and discretionary trusts 513 00:26:53,700 --> 00:26:56,800 in a hybrid trust the trustee must pay a certain amount of the 514 00:26:56,800 --> 00:26:59,300 trust property to each beneficiary fixed by the 515 00:26:59,500 --> 00:27:01,600 Rattler. But the trustee has discretion 516 00:27:01,600 --> 00:27:03,800 as to how, any remaining trust property. 517 00:27:03,900 --> 00:27:06,900 Once these fixed amounts have been paid out, is to be paid to 518 00:27:06,908 --> 00:27:11,000 the beneficiaries implied, trust as distinct from an Express, 519 00:27:11,000 --> 00:27:14,000 trust is created where some of the legal requirements. 520 00:27:14,000 --> 00:27:17,100 For an Express trust are not met, but an intention on behalf 521 00:27:17,100 --> 00:27:20,000 of the parties to create a trust can be presumed to exist. 522 00:27:20,300 --> 00:27:23,000 A resulting trust, may be deemed to be present where a trust 523 00:27:23,000 --> 00:27:25,100 instrument is not properly drafted. 524 00:27:25,200 --> 00:27:28,400 And a portion of the Equitable Title has not been provided for 525 00:27:28,700 --> 00:27:30,700 in such a case. Case, the law May raise a 526 00:27:30,700 --> 00:27:33,900 resulting trust for the benefit of the grantor, the creator of 527 00:27:33,900 --> 00:27:36,600 the Trust. In other words, the grantor may 528 00:27:36,600 --> 00:27:39,500 be deemed to be a beneficiary of the portion of the Equitable 529 00:27:39,500 --> 00:27:42,100 Title that was not properly provided for in the trust 530 00:27:42,100 --> 00:27:45,800 document Improvement. Trust can be set up by the urban 531 00:27:45,800 --> 00:27:48,300 or local government to hold funds for the development or 532 00:27:48,300 --> 00:27:51,400 Improvement of an area. The trust is often run by a 533 00:27:51,400 --> 00:27:54,600 committee and can act similarly to a development agency 534 00:27:54,700 --> 00:27:56,800 depending on the provisions of its Charter. 535 00:27:57,100 --> 00:28:00,600 Middle dot incentive, trust a trust that Uses distributions 536 00:28:00,600 --> 00:28:03,300 from income or Principle as an incentive to encourage or 537 00:28:03,300 --> 00:28:06,800 discourage certain behaviors on the part of the beneficiary, the 538 00:28:06,800 --> 00:28:09,400 term incentive trust is sometimes used to distinguish 539 00:28:09,400 --> 00:28:12,400 trust that provide fixed conditions for access to trust 540 00:28:12,400 --> 00:28:14,200 funds. From discretionary trusts that 541 00:28:14,200 --> 00:28:18,200 leave such decisions up to the trustee, inter vivos trust or 542 00:28:18,200 --> 00:28:20,200 living trust a settler who is living. 543 00:28:20,200 --> 00:28:22,300 At the time, the trust is established creates. 544 00:28:22,300 --> 00:28:27,000 An inter vivos trust a revocable trust in contrast to a revocable 545 00:28:27,000 --> 00:28:29,700 trust and irrevocable. Trust is one in which which the 546 00:28:29,700 --> 00:28:32,400 terms of the trust cannot be amended or revised until the 547 00:28:32,400 --> 00:28:35,100 terms or purposes of the trust of been completed. 548 00:28:35,200 --> 00:28:38,100 Although, in rare cases, a court may change the terms of the 549 00:28:38,100 --> 00:28:41,200 trust due to unexpected changes in circumstances that make the 550 00:28:41,200 --> 00:28:44,700 trust uneconomical or unwieldy to administer under normal 551 00:28:44,700 --> 00:28:47,800 circumstances and irrevocable trust may not be changed by the 552 00:28:47,800 --> 00:28:50,700 trustee or the beneficiaries of the trust land. 553 00:28:50,700 --> 00:28:55,100 Trust a private nonprofit organization that as all or part 554 00:28:55,100 --> 00:28:58,700 of its Mission actively Works to conserve Land by undertaking or 555 00:28:58,700 --> 00:29:01,000 assisting in And our conservation easement 556 00:29:01,000 --> 00:29:03,900 acquisition or by its stewardship of such land or 557 00:29:03,900 --> 00:29:07,500 easements or an agreement whereby, one party the trustee 558 00:29:07,600 --> 00:29:10,300 agrees to hold ownership of a piece of real property for the 559 00:29:10,300 --> 00:29:14,200 benefit of another party. The beneficiary offshore trust 560 00:29:14,200 --> 00:29:17,000 strictly speaking. An offshore trust is a trust 561 00:29:17,000 --> 00:29:18,900 which is resident in any jurisdiction. 562 00:29:18,900 --> 00:29:21,100 Other than that, in which the settler is resident. 563 00:29:21,300 --> 00:29:24,100 However the term is more, commonly used to describe a 564 00:29:24,108 --> 00:29:26,600 trust in one of the jurisdictions known as offshore 565 00:29:26,600 --> 00:29:30,400 Financial centres or colloquially as Tax Havens 566 00:29:30,600 --> 00:29:33,600 offshore trusts are usually conceptually similar to onshore 567 00:29:33,600 --> 00:29:36,900 trusts in common law countries but usually with legislative, 568 00:29:36,900 --> 00:29:39,700 modifications to make them more commercially attractive by 569 00:29:39,700 --> 00:29:43,500 abolishing or modifying certain common law restrictions by 570 00:29:43,500 --> 00:29:46,500 extension on Shore. Trust has come to mean any trust 571 00:29:46,500 --> 00:29:49,900 Resident in a high tax jurisdiction, personal injury, 572 00:29:49,900 --> 00:29:53,200 trust a personal injury. Trust is any form of trust where 573 00:29:53,200 --> 00:29:56,100 funds are held by Trustees. For the benefit of a person who 574 00:29:56,100 --> 00:29:58,800 has suffered an injury and funded exclusively by funds, 575 00:29:58,800 --> 00:30:01,100 derived. Payments made in consequence of 576 00:30:01,100 --> 00:30:05,100 that injury private and public trusts a private trust has one 577 00:30:05,100 --> 00:30:09,400 or more particular individuals, as its beneficiary by contrast a 578 00:30:09,400 --> 00:30:12,500 public trust. Also called a charitable trust 579 00:30:12,600 --> 00:30:16,200 has some charitable and is its beneficiary to qualify as a 580 00:30:16,200 --> 00:30:18,600 charitable. Trust the trust must have as its 581 00:30:18,600 --> 00:30:21,600 object certain purposes such as alleviating poverty. 582 00:30:21,700 --> 00:30:25,700 Providing education carrying out some religious purpose, Etc. 583 00:30:25,700 --> 00:30:28,000 The permissible objects are generally set out in 584 00:30:28,000 --> 00:30:31,100 legislation, but Objects not explicitly set out. 585 00:30:31,100 --> 00:30:34,600 May also be an object of a charitable trust by analogy. 586 00:30:34,800 --> 00:30:37,700 Charitable trusts are entitled to special treatment under the 587 00:30:37,700 --> 00:30:41,700 law of trusts and also the law of Taxation protective trust 588 00:30:41,800 --> 00:30:43,500 here. The terminology is different 589 00:30:43,500 --> 00:30:46,700 between the UK and the USA in the UK. 590 00:30:46,800 --> 00:30:49,700 A protective trust is a life interest that terminates upon 591 00:30:49,700 --> 00:30:52,700 the happening of a specified event such as the bankruptcy of 592 00:30:52,700 --> 00:30:56,400 the beneficiary or any attempt by an individual to dispose of 593 00:30:56,400 --> 00:30:59,300 his or her interest, they have become comparatively rare. 594 00:30:59,900 --> 00:31:03,100 In the u.s. a protective, trust is a type of trust that was 595 00:31:03,100 --> 00:31:05,000 devised for use in Estate Planning. 596 00:31:05,300 --> 00:31:07,900 In another jurisdiction, this might be thought of as one type 597 00:31:07,900 --> 00:31:11,700 of asset protection. Trust often a person, a wishes 598 00:31:11,700 --> 00:31:13,600 to leave property to another person. 599 00:31:13,600 --> 00:31:17,600 Be a however fears that the property might be claimed by 600 00:31:17,600 --> 00:31:20,700 creditors before a dies and that therefore be would receive none 601 00:31:20,700 --> 00:31:22,900 of it. I could establish a trust with 602 00:31:22,900 --> 00:31:26,200 be as the beneficiary, but then a would not be entitled to use 603 00:31:26,200 --> 00:31:29,700 of the property before they died protective trusts were Developed 604 00:31:29,700 --> 00:31:33,200 as a solution to this situation, I would establish a trust with 605 00:31:33,200 --> 00:31:36,500 both A and B as beneficiaries with the trustee instructed to 606 00:31:36,500 --> 00:31:39,700 allow a use of the property until they died and thereafter 607 00:31:39,700 --> 00:31:42,200 to allow. Its used to be the property is 608 00:31:42,200 --> 00:31:44,700 then safe from being claimed by Ace creditors. 609 00:31:44,900 --> 00:31:47,600 At least so long as the debt was entered into after the trust's 610 00:31:47,600 --> 00:31:51,400 establishment this use of trusts is similar to life Estates and 611 00:31:51,400 --> 00:31:54,800 remainders and is frequently used as an alternative to them 612 00:31:55,100 --> 00:31:57,800 purpose. Trust or more accurately 613 00:31:57,900 --> 00:32:01,100 non-charitable purpose. Just all charitable, trusts are 614 00:32:01,100 --> 00:32:03,800 purpose. Trusts generally, the law does 615 00:32:03,800 --> 00:32:06,500 not permit non-charitable. Purpose trusts outside of 616 00:32:06,500 --> 00:32:09,200 certain anomalies exceptions which arose under the 18th 617 00:32:09,200 --> 00:32:12,500 century, common law and arguably Quest. 618 00:32:12,500 --> 00:32:15,200 Close trusts certain jurisdictions. 619 00:32:15,300 --> 00:32:18,700 Principally offshore jurisdictions have enacted 620 00:32:18,700 --> 00:32:21,100 legislation validating non-charitable purpose. 621 00:32:21,100 --> 00:32:25,200 Trust generally tip Trust Short for qualified terminable 622 00:32:25,200 --> 00:32:28,800 interest property a trust recognized under the tax laws of 623 00:32:28,800 --> 00:32:32,200 the It states, which qualifies for the marital gift exclusion 624 00:32:32,200 --> 00:32:35,500 from the estate tax resulting trust a resulting. 625 00:32:35,500 --> 00:32:39,100 Trust is a form of implied. Trust which occurs where one a 626 00:32:39,100 --> 00:32:42,900 trust fails wholly, or in part as a result of which the settler 627 00:32:42,900 --> 00:32:47,200 becomes entitled to the assets, or to a voluntary payment is 628 00:32:47,200 --> 00:32:49,700 made by a to be in circumstances, which do not 629 00:32:49,700 --> 00:32:53,800 suggest gifting be becomes the resulting Trustee of Ace payment 630 00:32:54,000 --> 00:32:56,500 revocable. Trust, a trust of this kind may 631 00:32:56,500 --> 00:33:00,900 be amended altered or revoked by it's At any time provided the 632 00:33:00,900 --> 00:33:03,400 settler is not mentally incapacitated. 633 00:33:03,600 --> 00:33:06,800 Revocable trusts are becoming increasingly common in the US as 634 00:33:06,800 --> 00:33:09,600 a substitute for a will to minimize administrative costs 635 00:33:09,600 --> 00:33:12,200 associated with probate and to provide centralized 636 00:33:12,200 --> 00:33:14,300 administration of a person's final Affairs. 637 00:33:14,300 --> 00:33:18,400 After death secret trust a post-mortem trust, constituted 638 00:33:18,400 --> 00:33:21,000 externally from a will but imposing obligations as a 639 00:33:21,008 --> 00:33:26,000 trustee on one or more legatees of a will semi-secret trust a 640 00:33:26,000 --> 00:33:28,300 trust in which a will demonstrates the intention to 641 00:33:28,300 --> 00:33:31,000 create a trust. First names a trustee but does 642 00:33:31,000 --> 00:33:33,400 not identify the intended beneficiary. 643 00:33:33,700 --> 00:33:37,600 Simple trust in the US jurisdiction is has two distinct 644 00:33:37,600 --> 00:33:40,200 meanings section in a simple. Trust. 645 00:33:40,200 --> 00:33:43,300 The trustee has no active duty Beyond conveying the property to 646 00:33:43,300 --> 00:33:46,600 the beneficiary at some future time, determined by the trust. 647 00:33:46,900 --> 00:33:48,800 This is also called a bare trust. 648 00:33:49,100 --> 00:33:51,700 All other trusts are special trusts where the trustee has 649 00:33:51,700 --> 00:33:54,100 active duties Beyond this section. 650 00:33:54,100 --> 00:33:57,700 A simple trust in federal income tax lies one in which under the 651 00:33:57,700 --> 00:34:00,400 terms of the trust document. All net income must be 652 00:34:00,400 --> 00:34:04,200 distributed on an annual basis in the UK, a bear. 653 00:34:04,200 --> 00:34:07,300 Simple, trust is one where the beneficiary has an immediate and 654 00:34:07,300 --> 00:34:09,900 absolute right to vote the capital and income held in the 655 00:34:09,900 --> 00:34:12,300 trust. Bear trusts are commonly used to 656 00:34:12,308 --> 00:34:14,900 transfer assets to minors. Trustees. 657 00:34:14,900 --> 00:34:18,600 Hold the assets on trust until the beneficiaries 18 in England 658 00:34:18,600 --> 00:34:23,400 and Wales or 16 in Scotland special trust in the u.s.a. 659 00:34:23,600 --> 00:34:27,600 Special trust also called complex, trust contrast with a 660 00:34:27,600 --> 00:34:31,400 simple trust, see above Of it does not require the income be 661 00:34:31,400 --> 00:34:33,500 paid out within the subject tax year. 662 00:34:33,800 --> 00:34:36,699 The funds from a complex. Trust can also be used to donate 663 00:34:36,699 --> 00:34:40,100 to a charity or for charitable purposes, special power of 664 00:34:40,100 --> 00:34:44,100 appointment, trust SP a trust, a trust implementing, a special 665 00:34:44,100 --> 00:34:47,199 power of appointment to provide asset protection features 666 00:34:47,600 --> 00:34:50,500 spendthrift trust. It is a trust put into place for 667 00:34:50,500 --> 00:34:53,100 the benefit of a person who is unable to control their 668 00:34:53,100 --> 00:34:56,000 spending, it gives the trustee the power to decide how the 669 00:34:56,000 --> 00:34:59,100 trust funds may be spent for the benefit of the beneficiary. 670 00:34:59,400 --> 00:35:03,100 Standby trust or pour-over. Trust the trust is empty a 671 00:35:03,100 --> 00:35:06,100 creation during life in the will transfer the property into the 672 00:35:06,100 --> 00:35:09,100 trusted death. This is a statutory trust 673 00:35:09,400 --> 00:35:12,700 statutory business. Trust a trust created pursuant 674 00:35:12,700 --> 00:35:15,500 to a state's business. Trust statute used primarily for 675 00:35:15,500 --> 00:35:19,600 commercial purposes to prominent variants of statutory business. 676 00:35:19,600 --> 00:35:22,700 Trusts are Delaware statutory, trusts in Massachusetts, 677 00:35:22,700 --> 00:35:26,600 business trusts the uniform. La comisión promulgated a final 678 00:35:26,600 --> 00:35:32,600 amended draft of the uniform statutory T act 2009 in 2013 as 679 00:35:32,600 --> 00:35:36,500 of January 24th, 2017. No states, have adopted the 680 00:35:36,500 --> 00:35:41,700 uniform, statutory entity Act of 2009 testamentary, trust or will 681 00:35:41,700 --> 00:35:44,600 trust a trust created? In an individual's will, is 682 00:35:44,600 --> 00:35:47,700 called a testamentary trust because a will can become 683 00:35:47,700 --> 00:35:50,000 effective only upon death a testamentary. 684 00:35:50,000 --> 00:35:52,700 Trust is generally created a tour following the date of the 685 00:35:52,700 --> 00:35:55,700 settlers death unit. Trust a trust were the 686 00:35:55,700 --> 00:35:59,200 beneficiaries called Unit holders each possess a certain 687 00:35:59,300 --> 00:36:02,700 Chair called units and can direct the trustee to pay money 688 00:36:02,700 --> 00:36:04,100 to them out of the trust property. 689 00:36:04,100 --> 00:36:07,400 According to the number of units, they possess a unit trust 690 00:36:07,400 --> 00:36:09,900 is a vehicle for Collective investment rather than 691 00:36:09,900 --> 00:36:12,800 disposition as the person who gives the property to the 692 00:36:12,800 --> 00:36:15,600 trustees. Also the beneficiary country 693 00:36:15,600 --> 00:36:19,300 specific variations trusts originated in England and 694 00:36:19,300 --> 00:36:22,600 therefore English trusts law has had a significant influence, 695 00:36:22,700 --> 00:36:26,200 particularly among common law legal systems such as the United 696 00:36:26,200 --> 00:36:29,100 States and the countries of the Commonwealth trust law. 697 00:36:29,200 --> 00:36:32,000 And civil law jurisdictions generally, including 698 00:36:32,000 --> 00:36:34,600 Continental, Europe, only exists, in a limited number of 699 00:36:34,600 --> 00:36:38,600 jurisdictions for example, Curacao Liechtenstein and Sint 700 00:36:38,600 --> 00:36:40,600 Maarten. The trust May, however, be 701 00:36:40,600 --> 00:36:44,000 recognized as an instrument of foreign law in conflict of laws 702 00:36:44,000 --> 00:36:46,200 cases. For example, within the Brussels 703 00:36:46,200 --> 00:36:49,800 regime, Europe and the parties to the Hague trust convention 704 00:36:50,200 --> 00:36:52,300 tax avoidance, concerns have historically. 705 00:36:52,300 --> 00:36:55,000 Been one of the reasons that European countries with a civil 706 00:36:55,000 --> 00:36:59,000 law system have been reluctant to adopt trusts United States. 707 00:36:59,300 --> 00:37:03,400 In the United States state law governs trusts trust law is 708 00:37:03,400 --> 00:37:05,700 therefore variable from state to state, though. 709 00:37:05,700 --> 00:37:09,100 Many states have adopted the uniform, trust code and Broad 710 00:37:09,100 --> 00:37:12,000 similarities exist, among states, common law of trusts as 711 00:37:12,000 --> 00:37:13,800 well. These similarities are 712 00:37:13,800 --> 00:37:16,500 summarized in the restatements of the law such as the 713 00:37:16,500 --> 00:37:20,600 restatement of trusts 3rd. 2003 - 08. 714 00:37:20,800 --> 00:37:23,800 Additionally as a practical matter federal law 715 00:37:23,800 --> 00:37:26,800 considerations such as federal taxes administered by the 716 00:37:26,800 --> 00:37:29,300 Internal Revenue Service, may affect the structure And 717 00:37:29,300 --> 00:37:31,800 creation of trusts in the United States. 718 00:37:31,800 --> 00:37:35,200 The tax law allows trust to be taxed as corporations 719 00:37:35,300 --> 00:37:38,600 Partnerships or not at all, depending on the circumstances. 720 00:37:38,700 --> 00:37:41,400 Although trust may be used for tax, avoidance in certain 721 00:37:41,400 --> 00:37:44,100 situations. For example, the trust, 722 00:37:44,100 --> 00:37:47,800 preferred security is a hybrid debt and Equity security with 723 00:37:47,800 --> 00:37:51,100 favorable tax treatment, which is treated as regulatory capital 724 00:37:51,100 --> 00:37:54,800 on banks balance sheets, the Dodd-Frank Wall Street reform 725 00:37:54,800 --> 00:37:57,600 and consumer protection. Act change this somewhat by not 726 00:37:57,600 --> 00:38:02,000 allowing these assets to be a Of large Banks regulatory Capital 727 00:38:02,300 --> 00:38:07,100 estate planning living trusts as opposed to testamentary will 728 00:38:07,100 --> 00:38:09,900 trusts may help a trust or avoid probate. 729 00:38:10,200 --> 00:38:13,400 Avoiding probate May save costs and maintain privacy and living 730 00:38:13,400 --> 00:38:17,700 trusts have become very popular. Probate is potentially costly 731 00:38:17,800 --> 00:38:20,500 and probate records are available to the public while 732 00:38:20,500 --> 00:38:24,000 distribution through a trust is private both living trusts and 733 00:38:24,000 --> 00:38:27,300 Will's can also be used to plan for unforeseen circumstances 734 00:38:27,300 --> 00:38:31,500 such as incapacity or Leti by giving discretionary powers to 735 00:38:31,500 --> 00:38:35,400 the trustee, or executor of the will negative aspects of using a 736 00:38:35,400 --> 00:38:38,300 living trust as opposed to a will in Probate include upfront, 737 00:38:38,300 --> 00:38:42,200 legal expenses, the expense of trust Administration and a lack 738 00:38:42,200 --> 00:38:44,900 of certain safeguards the cost of the trust. 739 00:38:44,900 --> 00:38:48,800 Maybe 1% of the estate per year versus the one-time probate cost 740 00:38:48,800 --> 00:38:51,400 of 1 to 4 percent for probate which applies. 741 00:38:51,400 --> 00:38:54,600 Whether or not, there is a drafted, will unlike trusts, 742 00:38:54,600 --> 00:38:57,000 which must be signed by two to three Witnesses. 743 00:38:57,100 --> 00:38:59,100 The number depending on the law of the jurisdiction. 744 00:38:59,300 --> 00:39:02,300 And in which the will is executed legal protections, that 745 00:39:02,300 --> 00:39:05,400 apply to probate, but do not automatically apply to trusts 746 00:39:05,400 --> 00:39:07,600 include Provisions. That protect the decedent's 747 00:39:07,600 --> 00:39:10,500 assets from mismanagement or embezzlement, such as 748 00:39:10,500 --> 00:39:13,400 requirements of bonding insurance and itemized 749 00:39:13,400 --> 00:39:17,300 accountings of probate assets, estate tax effect. 750 00:39:17,300 --> 00:39:20,400 Living trusts generally do not shelter assets from the US 751 00:39:20,400 --> 00:39:24,100 federal estate tax. Married couples May, however, 752 00:39:24,200 --> 00:39:27,300 effectively, double the estate tax exemption amount by setting 753 00:39:27,300 --> 00:39:29,000 up the trust with a formula clause. 754 00:39:29,200 --> 00:39:32,600 As for a living trust, the grantor May retain some level of 755 00:39:32,600 --> 00:39:35,700 control to the trust. Such by appointment is protector 756 00:39:35,700 --> 00:39:37,700 under the trust instrument living. 757 00:39:37,700 --> 00:39:41,600 Trusts also in Practical terms tend to be driven to a large 758 00:39:41,600 --> 00:39:45,600 extent by tax considerations. If a living trust fails, the 759 00:39:45,600 --> 00:39:48,700 property will usually be held for the grantor /, settler on, 760 00:39:48,700 --> 00:39:52,500 resulting trusts, which in some notable cases has had high tax 761 00:39:52,500 --> 00:39:55,300 consequences, the lowest School of America. 762 00:39:55,400 --> 00:39:58,800 The content used in the podcast is licensed by the Wikimedia 763 00:39:58,800 --> 00:40:00,500 Foundation. Datian Incorporated under a 764 00:40:00,508 --> 00:40:03,900 Creative Commons, attribution/share-alike license. 765 00:40:04,600 --> 00:40:06,800 The text has been modified for audio. 766 00:40:07,500 --> 00:40:11,200 The content of these podcasts is for informational purposes only 767 00:40:11,200 --> 00:40:13,700 and do not constitute professional advice. 768 00:40:14,500 --> 00:40:17,400 These podcasts are not associated with the Wikimedia 769 00:40:17,400 --> 00:40:20,800 foundation in any context, the Louis School of America.