Purpose Trusts (in this case – non-charitable purpose trusts) are usually not permitted – with the exception of certain offshore jurisdictions. All charitable trusts are considered purpose trusts.

A Resulting Trust is actually a form of an implied trust. This can result from the original trust failing (either whole or in part) and the settlor, once again, becomes entitled to the assets. Another scenario could involve a payment of the assets being made, which cannot be considered as a gift.

A Revocable Trust can be amended or revoked at any time by the settlor (unless mental illness is proven). This type of trust is increasing in popularity and is used as a substitute for a will. This will decrease costs that can occur with probate and serves to centralize the administration of the settlor’s assets upon death.

A Secret Trust is also known as a post mortem trust and is a function of a will which imposes certain obligations with the will operating as a trustee.

A Simple Trust is one in which the trustee distributes the assets to the beneficiary, according to the specific terms of the trust. In Federal income tax law, a simple trust is one in which the net income must be distributed on a yearly basis.

A Special Trust exists in contrast with a Simple Trust – see above.

A Spendthrift Trust will allow the trustee to determine the amount distributed to the beneficiary in order to control excessive spending.

A Testamentary Trust (Will Trust) is created within a settlor’s will and becomes effective upon death. This trust is usually created at the time of death or thereafter.

A Unit Trust is one where each beneficiary holds a certain number of trust units that amount to a percentage of that trust. The beneficiaries can then direct the trustee to pay them out of the trust according to the amount of units that they possess.

This list should be considered as a starting point for understanding trust designations. However, new trust types are continually being designed to meet the needs of potential settlors.

Please note that this article is for informational purposes only and is not intended as legal advice.

More information concerning trusts and trust law can be found by clicking here. Or you can contact Florida Probate Lawyer Adrian Philip Thomas, P.A. located in Fort Lauderdale, Florida.