Trusts can be thought of as a “legal box”. Property, real or personal, tangible or intangible, can be transferred into a Trustee’s name and managed according to the trust document. The trust document can designate how the property is to be handled during the lifetime of the person who transferred the property, and what is to happen when the person passes away. Trusts can control the property in more ways than a will. For instance Oklahoma property passing to minor children in Oklahoma will be held by a custodian or guardian until the children turn 18 years of age. A trust can hold the property until the children are much older, and can pay out benefits at different times. For instance a trust can distribute say ⅓ when the child reaches 21 years of age, another ⅓ when they reach 24 years of age, and the balance when the beneficiary reaches 30. There is a lot of flexibility and almost endless possibilities on how the trust designates the property in it is to be handled.
In Oklahoma there are two general types of trust:
- Revocable Trust
- Irrevocable Trust
As the names imply, a revocable trust can be changed, or done away with (revoked) and the property in the trust returned to the person who made the trust. (the “grantor”). An irrevocable trust cannot generally be changed or revoked.
Sometimes trusts are called “living trust”, it is a generic name for a trust made while a person is living. This is contrasted with a “testamentary trust” which is created after a person has passed away by their Last Will and Testament. It is important to not confuse a “living trust” with a living will which is a directive to physicians on how medical decisions are to be handled.
This article was written 1/20/2015 by Todd Willhoite, an estate planning attorney in Claremore, specifically for the Oklahoma jurisdiction. A different result may occur in a different jurisdiction and the law does change, so it is important to seek competent legal and tax advice from professionals before acting on anything written in this article. Abby Law Offices Inc is a law office that handles estate planning law in Claremore, Oklahoma.