What are Some Types of Trusts?

1. Intervivos Trust- Also known as a living trust which is created during the Settlor’s (person creating the trust) lifetime.

2. Revocable Trust – This trust is a trust that the settlor reserves the right to revoke the trust during his/her lifetime. One purpose of this type of trust is to provide effective management and control of the assets of the trust in the event of the incapacity of the settlor. Many people create revocable living trusts in order to avoid the expense and hassle associated probate proceedings. In this type of trust the settlor retains the power to distribute income and principal, to remove and appoint trustees, and to revoke, amend or alter the trust in a manner that the settlor chooses.

3. Irrevocable Trust – This type of trust can not be amended by the settlor. It is irrevocable.

4. Testamentary Trust - A testamentary trust is a trust create by a will. A testamentary trust does not avoid probate.

5. Totten Trust– This type of trust deals with bank accounts including joint accounts with right of survivorship provisions. In a Totten trust situation, the settlor retains full rights during their lifetime and retains the ability to revoke the trust.

6. Spendthrift – Spendthrift provisions place a valid restraint on the beneficiaries. Generally speaking absent public policy, a statute, or the trust instrument which states something to the contrary, a beneficiary can transfer their interest as a beneficiary in the trust to a 3rd party. However, a spendthrift clause can place a valid restraint on alienation (the ability to transfer) the beneficiaries interest in the trust. Spendthrift clause’s have the ability to protect trust assets from creditors or from the beneficiary from selling his /her interest in the trust.

7. Discretionary Trust – In a discretionary trust the Trustee has sole discretion to determine the distribution of the trust assets, including income and principal as governed by the terms of the trust. This type of trust is good if you have an irresponsible beneficiary that you want to receive the benefit of the trust, but you do not want that person to be able to control the trust.

8. Support Trust - A support trust is a trust wherein the trustee is responsible to pay income or principal to the beneficiary as necessary for the support of the beneficiary.

9. Charitable trusts – There are special rules (exemptions that would not apply to other trusts – e.g. Rules Against Perpetuities) that apply to Charitable trusts due to the substantial benefit to society in general. 1. First a charitable trust must be for a charitable purpose. 2. The trust must be in favor of a reasonably large class of unidentifiable beneficiaries. 3. The rules of Cy Pres (as near as possible) apply. 4. As previously stated a charitable trust may be perpetual and is not subject to the rules against perpetuities.

10. Constructive Trust & Resulting Trust – Among other things, one of the main features of a resulting trust or a constructive trust is the duty to convey title to the property in dispute.

11. Secret & Semi-Secret Trusts.

12. A/B Trusts.

13. QTIP Trusts

14. Crummy Trusts.

If you have additional questions or concerns please feel free to contact an attorney in our Orange County office for more information.