What is a trust agreement or a declaration of trust?

Typical provisions in a trust agreement or declaration of trust include a purpose statement of the trust, the names of the trust creator's family members, information on whether the trust creator or anyone else may amend or revoke the trust, who will serve as the initial trustee(s), and who will replace the initial trustee. Learn more about trust agreements in our free legal guide below.

Get Legal Help Today

 Secured with SHA-256 Encryption

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Full Bio →

Written by

UPDATED: Jul 15, 2021

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Declarations of trust are legal documents that set forth the terms and conditions of the trust. The differences between them are largely matters of style and local practice. They’re typically used to protect and divide real property upon the passing of one party. The legal owner isn’t necessarily the same as a trustee.

What are trust documents? The average reader may think of trust funds designed to become active once a child hits a certain age or meets set requirements. Many people set up trusts for tax and inheritance purposes under the name of the person passing on the trust property. All trusts are based on set provisions.

What Are the Provisions of a Trust Agreement?

A trust agreement is set up with certain provisions for the trust owner, trustees, and other parties. Typical provisions in a trust agreement or declaration of trust for an individual or married couple include a statement of the purpose of the trust, the names of the trust creator’s family members, information on whether the trust creator or anyone else may amend or revoke the trust, who will serve as the initial trustee(s), and who will replace the initial trustee if s/he is unable or unwilling to serve, in the event of illness, death or for any other reason.

Trust agreements also typically contain provisions for what powers the trustee(s) should have, both in terms of investment and in terms of management. They also stipulate the discretion the trustee is to have in terms of releasing money to beneficiaries, such as for educational purposes, and more.

One of the most basic provisions every trust has is whether is revocable or irrevocable. In other words, can the grantor cancel or amend the trust at any time, or do they need the permission of named trustees? Typically, a revocable trust becomes irrevocable after the deaths of the grantors.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption

What Is the Role of Trust Agreements in Estate Planning?

A trust document won’t face too many restrictions or legal requirements in most cases. The courts do sometimes deal with challenges to trust changes the same way they would with a will. In general, grantors do more work early on to make their intent clear.

Some people do it while young to prepare for future possibilities. Others only do it as they accrue more wealth and at a later age. When done properly with the help of an experienced estate lawyer, a trust instrument can ease the transfer of real property after death or at a certain age for the beneficiaries. They can also reduce tax burdens in some areas.

How Does a Certificate of Trust Play into Property Management?

Whether you have a joint owner of single registered owner, any assets divided in a trust document must be named and registered under that trust. For example, if you wanted to put your home under your trust, you would record with the state under your trust’s name. This can be done when buying, refinancing, or independently when your trust is written. Other property would need to have the legal title under the trust.

Once a trust document is activated by the death of the owner, it will lay out things like how the mortgage is to be paid. Generally, lenders will ask for the full trust agreement to ensure they know how their side will be paid before agreeing to a loan.

If you have further questions about trust agreements or estate planning, view the following section on FreeAdvice.com containing articles about setting Up a Trust, or consult with a qualified estate planning professional in your area.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption