1. Welcome to Unit 4 Wills and Trusts Ann Sanok Instructor

2. . When you create a trust, you have someone else, called a trustee, take over and manage your money, real estate or other kinds of assets for the benefit of a third person, called a beneficiary. Lets talk about Trust...

3. . Two main types of trusts: There are two types of inter vivos trusts: revocable and irrevocable

4. I Intervivos Trust Inter vivos (Latin, between the living) is a legal term referring to a transfer or gift made during one's lifetime, as opposed to a testamentary transfer (a gift that takes effect on death). The term is often used to describe a trust established during one's lifetime, i.e., an Inter vivos trust as opposed to a Testamentary trust which is established on one's death, usually as part of a will. An Inter vivos trust is often used synonymously with the more common term Living trust, but an Inter vivos trust, by definition, includes both revocable and irrevocable trust

5. revocable living trust.” A common type of trust is known as a “revocable living trust.” This is an alternative to a will. This means that as a trustor – or creator – you you can cancel or change a revocable living trust throughout your life — just as you could change a will. You do not have to name a trustee to handle a revocable living trust. You can manage the funds or other assets yourself. The trust can name someone else to act as trustee in case you later lose the ability to manage the trust. Like a will, a revocable living trust gives instructions as to how the your assets are to be distributed at your death.. Revocable Living Trust

6. A revocable living trust. Benefits are varied A revocable living trust can sometimes avoid the need for your estate to go through the court’s probate process after your death

7. . Irrevocable Trust A trust is irrevocable if it cannot be changed or terminated, even during the life of the trustor. With irrevocable trusts, the trustor cannot be the trustee. Some types of irrevocable trusts may reduce death taxes, and, in some cases, can save income taxes

8. The Ingredients Are: The five requirements of a valid trust are: a trustor, trust property, a valid trust purpose, a trustee, and a beneficiary

9. A Rose is a rose..... Creator of the trust.. Person setting up the trust. The person is commonly known as the trustor, though you may sometimes see the terms settlor or grantor.

10. The Trusty Trustee Trustee. The person in charge of the trust is known as the trustee. The trustee needs to understand the rules for the type of trust he or she is managing to make sure everything in the trust stays in working order.

11. You lucky beneficiary you.. Beneficiary. Just like with other aspects of an estate plan (a will, for example), a trust’s beneficiary benefits from the trust in some way, usually because the person or institution will eventually receive some or all of the property that was placed into trust.

12. Got Stuff? Property. After you place property into a trust, that property is formally known as trust property

13. . Who Owns the Trust? The trustee has legal title to the trust property, but the beneficiaries have equitable title to the trust property (separation of control and ownership) Quiz Alert!. The trustee owes a fiduciary duty to the beneficiaries, who are the "beneficial" owners of the trust property. (Note: A trustee may be either a natural person, or an artificial person (such as a company or a public body), and there may be a single trustee or multiple co- trustees.

14. The beneficiary does not hold legal title to trust property – only equitable title Remember...

15. What to do about that pesky nephew? Spendthrift trusts are types of irrevocable or revocable trusts that prevent beneficiaries from expending trust monies on things other than those permitted by the trustor

16. . A pour-over will distributes assets into an existing inter vivos trust

17. . Remainder Man Remainder persons receive the trust principal after the income beneficiary's rights are exhausted. For example, a person, D, gives ("devises") a piece of real property called Blackacre “to A for life, and then to B and her heirs.” A receives a life estate in Blackacre and B holds a remainder which is capable of becoming possessory when the prior estate naturally terminates (A’s death). However, B cannot claim the property until A's death.

18. . The Rule Against Perpetuities The Rule Against Perpetuities was developed as a reflection of public policy against the monopolization of property The rule prevents a person from putting qualifications and criteria in his will that will continue to control or affect the distribution of assets long after he or she has died, a concept often referred to as control by the "dead hand" Black's Law Dictionary defines the rule against perpetuities as "[t]he common-law rule prohibiting a grant of an estate unless the interest must vest, if at all, no later than 26 years (plus a period of gestation to cover a posthumous birth) after the death of some person alive when the interest was created

19. Any Questions? This week one DB ? A Quiz A Written Assignment: see doc share for a template