What is a Will Trust? Why is it needed?

1. What is a Will Trust? Why is it needed? To know about will trust, let us first understand the meaning of trust. A trust is an arrangement between three parties where the first party known as ‘Settlor’ is responsible for transfer the property or the rights of the property (for which trust is created) to a trustee, which is the second party. The trustee is the holder of the assets listed under the trust and who takes such responsibility for the benefits of beneficiaries, who are generally the family members of the settlor. This concept of safeguarding one’s property and ensuring its equal distribution between the beneficiaries has been in operation for centuries. Nowadays, this type of arrangement is addressed as a will trust. A will trust can be described as a trust formed with an individual’s will; here the term for ‘settlor’ is changed to ‘testator’ for the trust because the trustee(s) are appointed in their will to take control and responsibility of the estate or the property. To qualify as a trustee, one has to be over the age of 18 and there could be multiple trustees. Also, corporates entities, financial institutions, and other public bodies can act as trustees for the testator or the will trust created. The will also enlist the beneficiaries of the trust, the beneficiaries can either be family members or an individual, or a corporate entity. However, most of the will trusts are created for charity purposes. Why it is important to make will trust for a property? Will trusts are a great way to have some control over your property even after you are dead. This mechanism used for the transfer of property has become widely adopted over the years. For instance, the testator to a will trust lives in a place owned by him and possess it with another partner, and the testator would want their partner to have somewhere to live after their death. But in the end, they intend to hand over the property to their children from another relationship or marriage. In this scenario, the testator gets the facility to enlist their main home or residence into the trust and formulate the manner in which the property is going to be held. The manner or the terms for the property distribution could be very specific where he mentions the conditions where his current partner could be entitled to the property or in the same manner, the terms on which the children get the hold over the property, this way the whole process is made transparent. The drafted will trust assures that all the whims and conditions of the testator are met and he vests in the trustee the powers that necessitate the enforcement of the terms listed in the will trust. Different types of Trusts

2. There are different types of trusts with the varied application and uses, some of the trusts are mentioned here. Bare trust: By its name, this type of trust implies a trust in which both the capital and income are entitled to the beneficiary. This trust is useful in the case of minor children where the trustee looks after the income and capital till the beneficiary reaches 18 years of age. Discretionary trust: Opposing to a bare trust, a discretionary trust does not confer in the beneficiary the right over the income and capital. Both the income and capital and their distribution between the beneficiaries are managed by the trustee. This trust is useful for business purposes as the testator can appoint trustees to overtake his business after him. The beneficiaries here are the family members of the testator. Living trust: Living trust is created when you wish to exercise power over the property or assets for a lifetime. In this case, the testator or settlor, trustee, and beneficiary are a single and the same person. Also, you name a successor to take care of the property or assets after your death. The trustee regulates and decides the manner in which the property or assets are going to be distributed. This is a revocable trust and you can repel it any time you want during your lifetime. It is crucial to have a will, trust, or any kind of testament for your property or assets these days. The type of trust that best fits your needs is a determinant of various factors and you should get legal aid if you cannot decide which trust to go for.