Common Law of Trusts


While trusts are widely used in the United States, their legal requirements are not uniform. Though many states have enacted the Uniform Trust Code, common law of trusts still varies from state to state. However, there are some similarities between states’ common law of trust. Restatements of the Law (RTL) summarize common law of trust. Trusts are also subject to federal tax and law considerations. Therefore, understanding the nuances of trusts can be an important part of planning an estate.

There are several ways to fund a trust. The first and most basic is to move assets into the trust, making the Trust the new owner. Transferring assets into the trust is simple. Then, renaming the asset to make it a Trust-owned property is a quick and simple process. The final step in funding a trust is to choose a trustee. Listed below are some of the most common steps to take. For more information, visit the National Association of Trust Agents website.

Constructive Trust: Another option is to establish a constructive trust. This is different from an express trust. A constructive trust is not created by an agreement between the settlor and the trustee. It is created by the law as an “equitable remedy” and is generally due to wrongdoing. Regardless of its origin, a wrongdoer has legal title to the property but cannot benefit from it. While a constructive trust is a legal fiction, a plaintiff may successfully request that the person holding assets deliver the assets to the rightful owner.

A revocable trust can be changed during the grantor’s lifetime. This type of trust cannot be amended once set up. However, it can be used for estate planning and is advantageous in some situations. For example, an irrevocable trust can protect assets from creditors and avoid estate taxes. It may also be beneficial for those who are prone to lawsuits. While revocable trusts have certain advantages, irrevocable trusts are the best option for those who wish to protect tangible property from litigation.

Although trusts are typically used by high-net-worth individuals, middle-class individuals may find them useful. These individuals may be using trusts to care for a disabled dependent or for privacy purposes. For example, a trust may be more private than a will, which is a potential legal issue if your will becomes public. However, some people may be unable to afford a will, but still want to protect the privacy of their heirs.

Another reason to use a trust is for tax planning purposes. When properly executed, a trust will reduce the hassles faced by your family when you pass away. Furthermore, it may even enable you to leave a charitable legacy for your family. You can also use a trust to supplement your will in case you die. Furthermore, trusts offer other benefits to estate planning that a will can’t. They may allow heirs to settle their estate quickly, minimizing the hassles they face.