What is a trust?
A trust is one possible vehicle for managing your assets during your lifetime and/or disposing of them at your death. There are two basic types of trusts: Living Trusts and Testamentary Trusts. “Living” means that the trust is created and funded during your lifetime, rather than at your death. Testamentary trusts are incorporated into the creator’s Will, so that they are not funded until the person who created the Will dies.
A trust is a property arrangement in which a trustee, such as a person or a bank trust department, holds title to, takes care of, and in most cases, manages property for the benefit of one or more third parties (beneficiaries). The creator of a trust is called the “trustor,” and is also known as the “settlor” or “grantor.” Trusts may be revocable or irrevocable. Revocable trusts can be changed or revoked at any time. For this reason, the government considers the specified assets to still be included in the grantor’s taxable estate. Therefore, you must pay income taxes on revenue generated by the trust and possibly estate taxes on those assets remaining after your death. An irrevocable trust, on the other hand, cannot be changed once it is set up. The assets placed into an irrevocable trust are permanently removed from the grantor’s estate and transferred to the trust. Income and capital gains on assets in the trust are paid by the trust. Upon a grantor’s death, the assets in the trust
A trust is a document that creates a new legal entity. Property owned by this new legal entity (the Trust) avoids probate. A Trust also creates a fiduciary relationship between the person who creates the trust (the donor or settlor) and the Trustee or Trustees nominated under the instrument. This relationship is a very important one because the donor or settlor grants to the Trustee the possession and title of the real and personal property when the donor or settlor transfers to or funds the trust. The trust instrument then directs that the assets of the trust be used for your benefit or the benefit and use of others (the beneficiaries). There are various classes of people who fall into the category of beneficiary and they hold the equitable title to teh trust property. Trust agreements that are found under the term of a will are know as testamentary trusts. Trus agreements may be created outside of a will, during the lifetime of the donor or settler; such trusts are known as inter viv
A trust is a right of property, held by one party for the benefit of another. A variety of trust instruments are available, depending on the needs and desires of the parties. A “grantor” is the one who provides money or property to establish the trust; a “beneficiary” is one for whose benefit the trust is established; the “trustee” carries out the responsibilities of the grantor by caring for, investing, protecting, and distributing the proceeds of the trust, in compliance with the expressed wishes of the grantor. The trustee may be one or more individuals, or a corporate entity such as a bank or trust company.
A Trust is quite simply an agreement between one person (the settlor) who gives to another person (the Trustee) an asset, in this case an aircraft, to hold on certain terms. In the case of an Owner Trust the aircraft is typically held solely for one beneficiary which is the settlor. The reason that a Trust is required by the FAA is that in this way they can ultimately control the aircraft through their US Citizens who are the registered trustees of US registered aircraft.
