Estate Planning 101 – Trusts – Beginnings

The last blog post looked at the three basic parties to a trust: the Settlor, the Trustee, and the Beneficiary.

When Does a Trust Begin?

This blog post looks at the issue of when does a trust begin. Or said another way in light of the last blog post: when do the Settlor, Trustee, and Beneficiary get together and begin the trust relationship.

Two Basic Answers

Trusts are flexible arrangements, and they can exist in a wide variety of forms. But the answer in estate planning is usually one of two times.  First, during the life of a Settlor – when they decided to set one up.  Second, at the death of a Settlor – through their Will.

Living Trusts

Living Trust are set up during the life of a Settlor, while they are of sound mind. The exact time depends on basically when the Settlor decides to create the trust arrangement.

The process might be something like what follows. Someone begins thinking about setting up a trust or doing other estate planning.  So, they begin visiting with their attorney and other advisors.  Next they review drafts of documents.  They eventually, on a certain day, sign the necessary documents to create and fund (or fill up with property) their trust.

The actual title of the trust will often reflect this. For example, you might have “The Joe Client Revocable Living Trust, dated March 18, 2019.”  The emphasis is added here to show that from the name, this was likely a trust set up by Joe Client, while alive, on a certain date.  We will look at the Revocable part in the next blog post.

Testamentary Trusts

The other main time a trust will begin is at the death of a Settlor. The Settlor will usually provide that a trust be created and/or funded (filled up with property) by their Last Will and Testament.  The emphasis is added here to shows that Testamentary Trusts are generally set up or funded by Wills.

The funding of the trust in this circumstance will likely happen at the end of the probate process in a final decree or order from a Court. And the name might be something like, “The Joe Client Testamentary Trust.”  Or it might contain other information such as a particular beneficiary, the date of the will, or the date of distribution.

If our office may be of assistance to you in these areas, do not hesitate to contact us at (580) 338-6503 or at coryhicks@fieldandhicks.com or using any of our contact information in the profile.  You can also visit www.fieldandhicks.com for more information.

This blog contains general information and the opinions of the author – not legal advice; you should seek the advice of competent counsel (attorney/lawyer) when considering any legal issues.