A trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property or assets for the benefit of a third party, the beneficiary. The trust is managed by a trustee according to directives set forth in the trust document. Trusts have obvious advantages for many people, but for beneficiaries who have disabilities, the development of a carefully structured trust can mean the difference between care which only meets minimal needs and a future abundant with personal services, recreational benefits, and other additional benefits which public support cannot provide. The creation of a trust affords a future with the security that the beneficiary will not be totally dependent on the vagaries of public entitlements.
There are many types of trusts. The following are some of the more common trusts in which Guardianship Services of Seattle is named trustee.
Special Needs Trust (SNT) – A type of trust by which funds can be set aside to be used for the extra and
supplemental needs of a beneficiary while preserving the beneficiary’s right to receive needs-based government assistance. The source of funds may be a relative, a personal injury damage settlement, a marital separation, or, under certain circumstances, an incapacitated person's own funds. The trust preserves funds and gives the trustee flexibility to meet training, medical, recreational and other needs of the disabled person over and above what would otherwise be provided by the government. It protects the person’s eligibility for public support and prohibits the invasion of the trust by anyone except the trustee for any purpose.
Settlement Trust – A settlement in trusts law is a deed (also called a trust instrument) whereby real estate, land, or other property is given by a settlor into trust so that the beneficiary only has the limited right to the property (for example during their life), but usually has no right to transfer the land to another or leave it in their own will. Instead the property devolves as directed by the settlement. Settlement Trusts are often created by the court with the proceeds from a personal injury suit. A settlement trust functions very much like a special needs trust. It protects government entitlements for which the beneficiary maybe eligible. As trustee, GSS has the necessary technical expertise to carry out the requirements of the trust but consults closely with the family for input on specific needs of the beneficiary and spending.
Revocable Living Trust (RLT) – A revocable trust is a trust whereby provisions can be altered or canceled dependent on the grantor. During the life of the trust, income earned is distributed to the grantor, and only after death does property transfer to the beneficiaries. This type of agreement provides flexibility and income to the living grantor, as they are able to adjust the provisions of the trust and earn income, all the while knowing that the estate will be transferred upon death.
Living Trust – A trust created and funded during the lifetime of the trustor.
Testamentary Trust – A trust created and brought into being by a person’s will.