Not sure which one is right for you? A family trust is a trust in which meaning of settlor in trust deed beneficiaries are family relations of the grantor.
Since the assets of a revocable trust legally belong to the grantor, beneficiaries have no rights in trust assets that are not subordinate to the grantor’s right to unilaterally revoke the trust. The assets of an irrevocable trust, by contrast, legally belong to the beneficiaries subject to the trustee’s fiduciary authority. Distributions A beneficiary has the right to receive distributions from the trust that are mandated by the terms of the trust deed, and the trustee may not withhold such distributions. Some trust deeds vest the trustee with discretionary authority, and a beneficiary is generally not entitled to a discretionary distribution.
Information A beneficiary of a family trust is entitled to an annual report: a detailed description, prepared by the trustee, of the trust’s income and expenses. If the trustee has the authority to invest trust assets, the trustee must report the details of these investments, including their gains or losses. Authority Over the Trustee Since the trustee is bound by a fiduciary duty of care toward trust assets, a beneficiary may collect damages from the trustee if he wastes trust assets through negligent mismanagement or self-dealing. A beneficiary may also petition a court to replace the trustee. Termination State laws vary on the authority of beneficiaries to terminate a trust.
Many states allow beneficiaries to terminate an irrevocable trust by unanimous consent. Some states require a court order, based on legal grounds such as fulfillment of the original purpose of the trust, even if all beneficiaries consent to the termination of the trust. A trust account, also called a trustee account or trust, is a legal relationship created by a settlor, in which a trustee holds property for a beneficiary. The settlor may be the same person as the trustee. Trustee Duties for a Revocable Trust After Death When a grantor creates a revocable trust, he must appoint a trustee to manage or administer the trust. Trustees have fiduciary duties, meaning they must always administer the trust in the best interest of the beneficiaries and pursuant to the terms of the trust document.