A trust is a common tool used to avoid having to go through probate. However, contrary to popular belief, avoiding probate does not avoid estate taxes, and estate taxes must be paid just as they would when someone has a will. This article offers general information about two specific types of trusts used fairly often in Connecticut, the revocable living trust and the irrevocable living trust.
A basic trust is a relationship between three people: a grantor, a beneficiary, and a trustee. The grantor gives property to the trustee to manage for the benefit of the beneficiary, according to certain rules written in the trust document. These three roles can be held by the same person. In fact, a person can give property to themselves to manage for their own benefit. The only way that this legal relationship avoids probate is if subsequent beneficiaries are named in the trust document, who will receive the property after the original beneficiary passes.
Types of Trusts
There are two types of trusts in Connecticut. A revocable living trust is a trust set up by an individual during his or her lifetime that can be completely changed or cancelled (revoked) at any time. An irrevocable living trust, on the other hand, is the second type and is not subject to revision or revocation.
The following table highlights the main provisions of Connecticut's Trust Laws. See FindLaw's Estate Planning section for more general information on those topics.
|Statute||Sec. 45a-471, et. seq.|
|Definition of Living Trust||
Living (Inter Vivos) Trust: A trust created and activated while the person who drafted it (settlor) is still living. It should not be confused with a living will, which is another legal
|Definition of Trustee||
Trustee: The person or institution entrusted with administering the trust. The term should be distinguished from an executor or administrator, who is responsible for settling a decedent's estate regardless of whether a trust is involved or not. The common characteristic that trustees, executors, and administrators share is that they are all fiduciaries, meaning that they have been entrusted with other people's property, and they are legally responsible to manage it properly
|Definition of Beneficiary||
Beneficiary: A person or institution for whose benefit the trust was created. A beneficiary is frequently a close relative of the settlor but need not be. Other typical beneficiaries include charities, friends of the settlor and others whom the settlor wishes to benefit in some way.
Note: If you would like to know more about revocable living trusts, and whether they are the best option for you, there are many estate planning attorneys throughout Connecticut who may be able to help.
Research the Law:
Connecticut Trust Laws: Related Resources
Contact a qualified attorney.