Small Trust Lawyers
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What Is a Trust?
A trust is an estate management tool that allows one person, a trustee, to be in charge of a piece of property for the benefit of other people, called beneficiaries. The trust is created when the original owner of the property, called the settlor or trustor, drafts a trust document and places the property in the care of the trustee. A trust may include real estate, cash, stocks, and/or bonds. Sometimes, economic difficulties can affect the trust. One negative effect economic difficulties can have on a trust is to cause it to become a small trust.
What Is a Small Trust?
A trust is referred to as small trust when the property held in trust decreases in value. When the property decreases in value, it means:
- Less money is available to pay debts incurred by the trust
- Smaller payouts to beneficiaries
- Less money to pay fee to a bank when using a corporate trustee
- Less money to pay the trustee as compensation for maintaining the trust
What Is a Small Trust Statute?
A small trust statute is a law that permits a trust beneficiary or trustee to change or terminate a trust when it becomes too small to oversee.
How Can I Terminate a Trust?
Terminating a trust is essentially ending the trust. How a small trust statute can be terminated depends on the jurisdiction. A small trust may be terminated:
- By modification or termination without court approval
- By termination or modification with approval from the court or beneficiary
- Only if the trust is under a specific value
Should I Modify or Terminate My Small Trust?
Whether you should modify or terminate your small trust depends on the circumstances. To modify a trust means it continues in a more financially stable way depending on the changes. To terminate a trust means the trustee distributes to property in trust according to the terms the individual outlined in the trust agreement.
Do I Need to Talk to a Lawyer?
Trusts are complex instruments that can be difficult to understand and manage. If you are having issues managing your small trust, talk to an estate lawyer. Based on the value, property, and circumstances, the lawyer will be able to advise you on whether you can and if you should modify or terminate the small trust.
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Last Modified: 12-07-2015 06:09 PM PST
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