A trust is a special legal relationship created when a person called a “settlor” gives an asset or property to a person called a “trustee” to hold the asset or property for a beneficiary. You can create an express written trust while you are alive. This is commonly referred to as a “living” trust or an “inter vivos” trust.
Trusts can also be created in a Will. When you create a trust in your Will, you are the settlor. The executor is typically the trustee and the beneficiary is typically a family member. Trusts created in a Will are commonly referred to as “testamentary” trusts.
Trusts are created for various reasons, the most common being:
- to control a beneficiary’s access to funds or assets;
- to protect the assets from creditors;
- tax planning considerations, and