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What is a trust?

My elderly aunt has just given my deadbeat brother a trust in her house. What is this, will it cause her problems in the future. Will this allow him to make medical decisions for her? He is greedy and will take anything he can steal from her.
Status: Open    Oct 06, 2016 - 03:22 PM

Elder Law

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Nov 02, 2016 - 03:44 PM

A trust is a legal creation that can hold assets that has to follow the rules of the document on how to hold, use, spend, invest, ect. those assets. It tells who can benefit and when. It describes what happens to the assets, if anything, at the death of the grantor.
Giving someone a trust in a house is not correct. She may have given him the property that takes effect after her death, placed the property in a trust and it will become his when she dies, or given him a life estate in the house (the right to live there until he dies).
A trust will not allow him to make medical decisions for her but if she had a trust created by an attorney she likely had other documents prepared such as a power of attorney, health care power of attorney, or health care proxy that could give him the power to make medical decisions.

Nov 10, 2016 - 08:42 AM

The phrase "trust in her house" is not a typical way to describe a trust relationship. Trusts also do not address personal medical decisions. It may help if I just provided a basic definition of a trust and that may help you in seeking additional information.

A trust is a legal relationship where someone places assets aside for the benefit of another person (called the "beneficiary"). The person in charge of those assets is the "trustee." For example, I can place a house in trust for my daughter. I could name her aunt as Trustee. My daughter could live in the house and enjoy its benefit until the trust terminates. A trust termination date is one of the many terms usually spelled out in the written trust agreement. The trustee is responsible for seeing that the terms are carried out.

Nov 10, 2016 - 08:44 AM

A trust is a set of instructions on how you want your money spent should you become disabled and unable to handle your finances yourself and also instructions on who is to inherit what from you and how. I’m not sure what a “trust in house” means unless she gave him some rights in the house, but not ownership of it.

Nov 10, 2016 - 08:46 AM

Trusts take a multitude of “shapes and sizes” and are created to serve a variety of purposes and uses. At their heart, however, all trusts are based on the concept of separating “Equitable Title” to property from “Legal Title.” Sounds fun, huh.

This means that a person who wants to set up a trust and/or place assets in trust (called a “Grantor”) can appoint one person (a trustee) to hold legal title to the assets – i.e., the trustee is the legal “owner” or “titled” owner of the property; however, the Grantor will name other persons who will retain Equitable Title or Beneficial Interest in the assets. These are the trust beneficiaries. Therefore, the trustee holds the trust assets for the benefit of the beneficiaries. The Trustee becomes a fiduciary and owes the trust beneficiaries various fiduciary duties (one commonly-referenced duty is the trustee’s duty “to make the trust property productive for the beneficiaries.”)

Generally, a Grantor (with the help of his/her attorney) will draw up a “trust agreement” which sets out all of the rules of the trust, the trustee’s rights and duties, and the beneficiaries’ rights. Trusts are, many times, private agreements.

It is impossible to discern what is going on with your aunt and your brother. A person must have testamentary capacity to create a trust, or someone else who holds a POA for your aunt could possibly set up a trust in her place. You should consult an attorney – maybe you will have the right to review the trust document, or maybe not. By researching the Register of Deeds records (the land records) for your county, you may be able to determine if your aunt has actually transferred her house to “so-and-so, Trustee…” or similar language, which would indicate that the house is now a trust asset.

Generally, trusts pertain to property and assets, and do NOT delegate rights for medical decision-making. Usually, a person executes a Medical or Healthcare Power of Attorney when they want to delegate medical decision making rights to someone else; however, your aunt could have done that as well.

There is a lot to this subject. This is not legal advice. You should definitely consult with an attorney experienced in the law of trusts.
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