Inheritances are often left directly to a person, which is called an “outright” distribution. At other times clients choose to have an inheritance held in Trust. Trusts at their most basic are arrangements where one person, the Grantor, transfers an asset to a second person, the Trustee, to hold for a third person, the Beneficiary. In some Trusts one person wears more than one of these hats, for example when a parent forms a Trust for a child (Beneficiary) and names that child as the Trustee. Trusts can be Irrevocable or Revocable (sometimes called “Living Trusts”), complex or simple and serve a multitude of purposes, but typically if a client wants to give money in trust for a Beneficiary the client will create the Trust in the client’s Will.
What if a client wishes to make a gift in his or her Will into a trust formed by someone else?
This question was addressed in an August 2006 Decree from the Orphans’ Court Division of the Court of Common Please of Chester County in the Estate of Elizabeth Harris, deceased. Thinking this case may have interest to you, I have written the following short article.