A trust is an estate planning tool that – among many other things –can give you peace of mind that your wishes will be carried out. There are several items that must be included in the trust.
Trust elements
First, the document should clearly state the purpose of the trust and whether it is revocable or irrevocable. A revocable trust can be changed during the trust creator’s lifetime, while an irrevocable trust generally can’t be changed.
The trust must designate a trustee, who is the person responsible for managing the trust assets. They have an obligation to act in the best interests of the trust. The document must also identify the trust beneficiaries and should explain how the trust assets should be distributed.
The assets and property that are part of the trust can also be listed, which may include bank accounts, real and personal property and investments, for example. It can describe any limitations on the trustee’s powers as well.
Qualities of a trustee
The trustee should be honest, reliable and act with integrity. They should be an effective communicator and capable of impartiality, meaning they can’t favor one beneficiary over another.
The trustee should understand financial decisions as they relate to investments, accounting and taxes.
Also, while it is not required, it may be helpful to consider choosing a trustee who is willing to serve for a long period of time. In some situations, it is a significant commitment to act as a trustee.
The trustee should understand the trust’s goals and be willing to carry them out.