General Considerations

Question 1

Revocable vs. Irrevocable Trusts

Answer 1

Under the traditional rule a trust was presumed to be irrevocable unless stated otherwise. Today majority jurisdictions follow the UTC approach, and a trust is presumed revocable by default unless the document says otherwise. If the trust is revocable, the settlor’s power to revoke naturally includes the power to amend or modify the trust. A settlor may amend or revoke a revocable trust by substantial compliance with a method provided in the terms of the trust.

Question 2

Parties to a trust

Answer 2

Grantor/settlor = the creator of the trust.
Trustee holds the legal interest or title to the trust property.
Beneficiary = receive the benefit of the trust

Question 3

Mandatory vs. discretionary

Answer 3

Mandatory trust requires the trustee to distribute all trust income.

In a discretionary trusts the trustee is given the power to distribute income at his discretion. The trustee does not abuse His discretion sunless he acts dishonestly or in a way not contemplated by the trust creator.

Question 4

What is a trust

Answer 4

A trust is a fiduciary relationship wherein the trustee is called upon to manage, protect, and invest certain property and any income generated therefrom for the benefit of one or more named beneficiaries. The trustee holds legal interest or title to the trust property. Should the trust be terminated, title would merge and would best in the beneficiaries.