In the USA state laws govern trusts. The National Conference of Commissioners codified the Uniform Trust Code in August 2004 and till now more than 20 states have adopted the same with variations. Estate planners use the trust mechanism both as a supplement to and as a substitute for the last Will and Testament. Before the introduction of the Uniform Trust Code, US states borrowed from the law of Massachusetts on the passing on of property to trust entities.
Trusts are essentially creatures of contract. While a ‘living trust’ instrument sets up trust when the grantor or settler is living, a Will creates a testamentary trust after the death of the grantor.
A trust can either be ‘revocable’ or irrevocable’. In a revocable trust the grantor or the settler retains the power to change or cancel the trust or to remove assets from the trust. Under the Uniform Trust Code any trust is revocable unless otherwise stipulated in the trust deed.
Trusts generally have one settler or grantor. However, there is a growing tendency among married couples to form joint trusts with both as co grantors.
In irrevocable trust there is growing use of an independent functionary as ‘trust protector’ with powers to alter the trust conditions in order to meet challenges posed by unexpected changes in the law or contingencies.
Competent individuals or federally or state chartered corporations with trust powers like banks or trust companies can be trustees.
Purpose of a trust includes asset management, estate and tax planning, estate tax avoidance, charity and so on.
(More http://topics.law.cornell.edu/wex/estates_and_trusts
http://www.hg.org/estate.html )
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