Estate Planning: Trusts

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Formulation of trust is rather very simple. The property owner gives the responsibility for the allocation and management of his property to certain person or organization also better known as trustees. These trustees are given the role of managing property for the benefit of other people or another person known as beneficiary. Trustees are solely responsible for any downfall as well as upgrade of the beneficiary’s property and needs to work according to the will and necessities of the beneficiary. If any trustee is not performing his task well, then the outcome of his carelessness is his responsibility. He is given proper compensation for his service but at the same time is legally bound to fulfill his duties towards the beneficiary.

Even the original property owner can act as a trustee if the prior trustee has not done what he is supposed to do. The transfer of his property to the trustee is the first step towards better management of the property. Also the beneficiaries if not of adult age do not have any authority to use the money themselves. They are taken care of by the trustees who use their money for any other purpose.

Basically there are two types of trusts. They are:

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