How are trusts formed?
An inter vivos or living trust is established upon the execution of a trust document. In essence, it is a contract among the following three parties: * The creator(s) of the trust, known as the settlor(s) or grantor(s), * An artificial entity, the trust, which is represented by a trustee (most often a natural person, though a corporation such as a bank or even a closely held corporation may also serve in this fiduciary role), and * The beneficiary(ies), who, while not receiving legal title to the trust property, obtains an equitable interest to the assets (i.e., the right to enforce the trust in court if the trustee is in violation of the agreement). The beneficiaries can either be the present or future recipients of benefits under the contract. In many living trusts, one spouse (or both) can be the grantor(s), trustee(s), and present beneficiary(ies). The benefits of the trust will be underutilized if a concurrent or subsequent re-titling of assets in the name of the living trust is n
