Are "Trusts" seen as separate legal entities by law?
Are "Trusts" seen as separate legal entities by law?
There's a lot of confusion about whether trusts are considered separate legal entities by law.
A trust is an arrangement in which a person, called the trustmaker, gives assets to another person, called the trustee, who holds them to be used for the benefit of a third party, called the beneficiary. In legal terms, a trust differs from a will in that it cannot be created by an individual; only a court can create a trust. Since trusts can be opened only by a court order, some people think that they are not real entities and do not have any legal rights.
While technically true that trusts must be created by court order in all states except Alaska and Vermont, once created they are recognized as separate entities under law and have many of the same rights as individuals. A trust is generally seen as having three main parts: property, trusteeship, and beneficiaries. The property includes the things owned by the trust, which usually consist of personal belongings or money. The trusteeship refers to the rights given to a trustee to manage or control the property held by the trust. Finally, beneficiaries involve naming someone who will receive anything leftover after all expenses are paid and debts are settled.
It is important to note that while trusts aren't usually seen as separate legal entities in most states, they do have many of the same rights as individuals.
With the rise in popularity of trusts, there has been a lot of confusion in the legal community about whether or not they are indeed separate legal entities. Some believe that they are not, while others believe that they are. This is due to the fact that more and more people are starting to use trusts as estate planning tools.
If you have any questions or in need a Trust Attorney, we have the Best Attorneys in Utah. Please call this law firm for free consultation.
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Disclaimer: This is not legal advice and is simply an answer to a question and that if legal advice is sought to contact a licensed attorney in the appropriate jurisdiction.
