Christine R. Settle | Posted on May 01, 2016
Since the Middle Ages, Trusts have been used as a means of having a third party take custody of and care for property at the request of another party. When the Romans would prepare to go off to battle, often for long periods of time, they would “entrust” their property to a friend with the agreement that, upon their return, their property would be transferred back.
Modern Trusts operate under a similar premise whereby the person setting up the Trust, known as the settlor, grantor or donor, names a trustee to manage the account. The trustee can be an individual person or persons, or a corporate trustee such as a bank. The settlor also names individuals or entities that will ultimately benefit from the Trust called the beneficiaries. The beneficiaries of a Trust can receive benefits from the account as the settlor sees fit, in the amounts and at the time intervals selected by the settlor. Family members, friends, churches, community groups, animal welfare organizations, educational institutions, hospitals, and other charitable entities are some common examples of beneficiaries.
Contrary to popular belief, Trusts are not just for the wealthy. Trusts are created for a multitude of reasons which may include providing financial protection for children or family members, professional management of property and investment services, protection in the event of incapacity, avoiding probate, and privacy. The terms of a Will become public record upon death whereas Trusts remain private and often provide for a speedy distribution.
Trusts can be inter-vivos, also known as Living Trusts, which are created during the settlor’s lifetime, or testamentary which are created through the settlor’s Last Will and Testament after death. Trusts created during the settlor’s lifetime may be revocable or irrevocable, although a Revocable Trust does not provide for the same tax benefits as an Irrevocable Trust. A variety of Trusts are available for almost any purpose. Recent laws have even made creating Trusts to care for a pet an option. Details of a Trust are customized to the situation. No two Trusts tend to be exactly the same. They are personalized to any desired specifics, as long as there are no conflicts with law.
As with any legal document, you should seek the guidance of an attorney for specific legal questions and drafting of a customized Trust document or Last Will and Testament. Like other financial institutions with Trust powers, the Bank often serves as a corporate trustee for individuals in our community and maintains the specialized skills necessary to manage a Trust account.