By Helen Hartman, CRPC®

When it comes time to write financial plans for estate planning, clients will inevitably ask about protecting their assets in a trust. A trust is a legal entity set up by an individual or group to house assets and distribute them according to a defined legal document. The document defines a fiduciary relationship where a named trustee holds a property or properties for a beneficiary as outlined by a legal document.

Let’s first look at the definitions of terminology in the relationship:

  1. Trustee- A trustee is a chosen individual/ entity who holds title to property for the benefit of another person/entity. The trustee is allowed only that which is defined within the trust document.
  2. Beneficiary- A beneficiary is the recipient of the benefits from the property held in trust.
  3. Trust indenture- The trust indenture is the legal agreement that establishes the trust, contains provisions of the trust, and sets forth the powers of the trustee.
  4. A person creating trust- creator, settlor, grantor, or donor. The person who creates the trust and determines its powers.
  5. Property held within trust- corpus, trustees, trust fund, or trust estate. Those assets the grantor has placed within the trust. *Until assets are placed in the trust, they are not subject to the confines of the trust.

Using the given and defined terms, a trust indenture is a document which names a trustee to oversee assets for a beneficiary. The grantor decides the powers of the trustee and the property to be held in the trust.