Trust Agreement

A Trust Agreement is known by many names (such as Living Trust, Family Trust, etc.) but the basic purpose of any trust is to hold property for a specific beneficiary until that beneficiary is capable of taking the property for themselves (if ever). A Trust Agreement is useful for the management of large sums of money (such as life insurance proceeds) that may come into the hands of a beneficiary at a young age or a beneficiary that is not capable of managing the money for some reason.

For example, if the parents of a young child die and the child receives a life insurance payout, then the court system may appoint someone to manage that money. The parents are deceased and therefore have no control over who that court-appointed supervisor may be! By establishing a Trust Agreement before a catastrophic event, the parents in this example can take control of those life insurance funds and ensure they are used for their child the way the parents wish.

Generally speaking, Trust Agreements can be modified from time-to-time as circumstances change, therefore they can be adapted after major life changes without the necessity of creating an entirely new Trust Agreement.