Overview
A Declaration of Trust is a formal legal document written by a trustee (the person responsible for managing the trust) to declare that they hold certain property, assets, or both in trust for the benefit of another person or entity (the beneficiary). This document outlines the terms and conditions of the trust, the responsibilities of the trustee, and the rights of the beneficiaries.
Examples
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Husband and Wife Trust: John and Jane create a trust for their family. John serves as the trustee and signs a Declaration of Trust to confirm that certain assets, such as their home and investment accounts, are held in trust for their children.
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Charitable Trust: A philanthropist who sets up a charitable trust for various humanitarian causes might sign a Declaration of Trust stating that their assets, including a building used for relief services, are held in trust to support these charitable activities.
Frequently Asked Questions
What information is typically included in a Declaration of Trust?
A Declaration of Trust usually includes:
- Names of the trustee(s) and beneficiary(ies)
- Description of the trust property
- Duties and powers of the trustee(s)
- Rights of the beneficiary(ies)
- Terms and conditions of the trust
Why would someone create a Declaration of Trust?
This document is created to ensure that property is managed and distributed according to the trustor’s wishes. It also provides legal protection and clarity, ensuring that the trustee is acting in the best interest of the beneficiaries.
Is a Declaration of Trust legally binding?
Yes, a Declaration of Trust is a legally binding document once it is properly executed and signed by all involved parties.
Can a Declaration of Trust be changed or revoked?
Yes, depending on the type of trust (revocable or irrevocable), a declaration can be amended or revoked. Revocable trusts allow for changes, while irrevocable trusts do not, except under specific and limited circumstances.
Who keeps the Declaration of Trust?
The trustee typically keeps the original Declaration of Trust document, while the beneficiaries and trustor (if different from the trustee) often receive copies.
Related Terms
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Trustee: An individual or organization that holds or manages the assets in a trust for the benefit of the beneficiary.
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Beneficiary: A person or entity entitled to benefit from the trust property as outlined in the Declaration of Trust.
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Trust Agreement: A formal agreement that sets up a trust and outlines the duties of the trustee and the rights of the beneficiaries.
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Irrevocable Trust: A type of trust that once created, cannot be easily changed or terminated by the trustee or the trustor.
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Revocable Trust: A type of trust that can be altered or terminated by the trustor during their lifetime.
Online Resources
References
- “Nolo’s Guide to Wills and Estates” by Denis Clifford
- “Trusts and Estates for Dummies” by Margaret Atkins Munro and Kathryn A. Murphy
- “The Complete Book of Trusts” by Martin M. Shenkman
- American Bar Association. (2021). An overview of trusts.
Suggested Books for Further Studies
- “The Law of Trusts and Trustees” by George Gleason Bogert and George Taylor Bogert
- “Understanding Trusts and Estates” by Roger W. Andersen
- “The Trustee’s Legal Companion: A Step-by-Step Guide to Administering a Living Trust” by Liza Hanks and Carol Elias Zolla
- “Wills, Trusts, and Estates, Ninth Edition” by Robert H. Sitkoff and Jesse Dukeminier
