The Various Parties of the Trust: Who’s Involved and What Each Party Does
Foreign trusts provide a valuable form of asset protection for investors. However, these investment tools can be quite complex for the layperson. Knowing each party that is affiliated with foreign trusts can help investors realize each party's objective and role within the international trust.
A res is an object of the fiduciary relationship. The res may be real property, cash or other property. The res may be known upfront, but other times, trust lawyers may help the settlor define the res, how it will grow and change over time, whether it may be sold and how to handle taxing issues regarding the property.
A beneficiary holds a beneficial interest in the trust. The beneficiary may be a child or other relative of the settlor, the person who establishes the trust. The trust may have multiple beneficiaries. For example, the trust may provide lifetime income to one person, and then, when that person dies or reaches a certain age, the trust may pass to that person's children or other individuals.
Special trusts called dynasty trusts allow income to be provided to beneficiaries for many years, maybe even up to 200 years. Beneficiaries can be anyone who the settlor decides, including lineal descendants, heirs or special classes of people.
The trustee legally owns the property. He or she takes legal title under the law where the trust is established. The trustee is also responsible for managing the property so that it can be used on behalf of the beneficiary. They are responsible for making repairs if the trust includes real property.
Additionally, the trustee must manage the property in a proper manner, whether it is a mutual fund, stock, bond or private investment. The trust lawyers at Nagel & Associates can help clients complete the important process of finding qualified trustees. They can also provide information about the necessary traits of a good trustee and where a settlor can find an appropriate one. To learn more, click here.