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A declaration of trust, also referred to as a trust deed or agreement, is a document used to list the terms of a trust. For example, a trust agreement lists such things as the trust’s purpose, the trust creator’s name, and the trustees’ names. It also includes such details as how the benefits of the trust should be distributed and who the beneficiaries are. A trust deed also lists the person who will serve as a replacement trustee, if one becomes necessary, as well as what level of authority the trustee will have.
When a person or group of people creates a trust, a declaration of trust is executed and signed. An individual who creates a trust includes his name, address, and date of execution of the trust in this document. He also includes the name and address of the trustee. Often, this document also includes provisions for assigning a new trustee in the event that the initial trustee is unable to serve. For example, a successor trustee may take over if the original trustee dies, becomes incapacitated, or is simply unwilling to serve.
As far as trustees are concerned, a trust deed typically lists the duties a trustee has and how he is to manage the trust. For example, if he will have the authority to make investment decisions for the trust, that will be stated in this document. Likewise, this document typically stipulates whatever discretion the trustee has in giving money to the beneficiaries of the trust. In some trusts, for example, a trustee may have the right to decide when and how to release money to the beneficiaries.
The declaration of trust may also include the names of the grantor’s immediate family members. For example, if he has a wife and children, it will usually include their names. This document may also include details about the beneficiaries, such as who they are and how the benefits will be determined. In a living trust, a married couple is typically the beneficiary even though one or both spouses created the trust. In other types of trusts, a person’s offspring, spouse, or other loved ones are often named as the beneficiaries. The trust deed typically includes when and how the beneficiaries are to benefit from the trust both before and after the grantor dies.
Some trusts are revocable, meaning the grantor can change his mind about the provisions within it. Others are not revocable, meaning the trust arrangement is set in stone once it is signed and executed. Information about whether or not the trust can be amended or revoked is typically included in a declaration of trust as well.