The living trust, which is also known as the “inter vivos trust,” is a very helpful tool for avoiding probate. The reason it is called a living trust is due to the fact that one creates the trust while he or she is still alive, instead of the trust being created upon one’s death. If you are considering creating a living trust, there are a few key elements that the trust will require.
First, the trust must have a settlor. This is the person that creates the trust; usually, it is this person’s property that is placed into the trust.
Second, the trust must have a trustee. This is the person that holds legal title to the trust property for the benefit of the beneficiaries (who hold equitable title to the trust property). The trustee has certain duties by which he or she must abide including the duty of loyalty, the fiduciary duty, and the duty to carry out the terms of the trust.
Third, the trust must have property. This property must be readily identifiable, definite and ascertainable, but does not need to be described with specificity.
Fourth, the trust must have beneficiaries. As is obvious from the name, a beneficiary receives the benefit of the trust, be it money, property, or something else.
Fifth, the trust must be created for a lawful purpose. This means that the purpose of the trust must not be illegal or against public policy, such as forcing someone to convert religions.