For many Texans, drafting estate planning documents can be a difficult chore. Knowing the preferable strategies is often difficult, but it is worthwhile. One estate planning document that can be beneficial is a trust. With a trust, there are certain requirements. Having a grasp of these factors is a foundational aspect of a legal trust.
When creating a trust, there are certain necessities. The settlor who is creating the trust must have an intent to do so, meaning that it was done on purpose. He or she must also have the capacity to convey his or her assets to the trust.
There is a mandatory Statute of Frauds. This means that it must be in writing with the settlor's signature or the signature of the trust's authorized representative. If it has personal property, it must be transferred to a trustee who is not the settlor nor the beneficiary if the transferor had the intention of creating it, or it must be declared in writing by the owner that the property is being held as a trustee for someone else.
There must be a legal purpose to the trust. The Settlor is required to identify the property that is in the trust and put it in the trust for the good of the beneficiary. There must be a trustee who will hold the title of the property for the good of the beneficiaries. The trust is required to have designated beneficiaries who can be found - if this is not the case, the trust will not work. The trust must adhere to the Rule Against Perpetuities. This means it must vest within 21 years for the person who is named in the trust with a period of gestation factored in if he or she has not been born yet.
When considering a trust, the basics are often overlooked. Knowing the requirements to formulate a legal trust is essential to ensure that it is carried out as the person wants. Discussing and planning the trust with an attorney who is fully versed in the types of trusts available and how to organize them is wise.
Source: FindLaw.com, "Texas Trust Laws," accessed on Oct. 17, 2017