Define: Express Active Trust

An express active trust is a legal arrangement where a person (the settlor) transfers property to another person (the trustee) to hold and manage for the benefit of specific beneficiaries. It is called “active” because the trustee has ongoing duties and responsibilities to administer the trust.

An express active trust is created through a written document, such as a trust agreement or declaration, where the settlor clearly expresses their intention to create a trust and identifies the trustee, beneficiaries, and the property to be held in trust.

The trustee has various duties, including managing the trust property, investing it prudently, distributing income or assets to the beneficiaries as specified in the trust document, keeping accurate records, and acting in the best interests of the beneficiaries.

Yes, the settlor can also serve as the trustee in an express active trust. However, it is important to ensure that the trust is not considered a sham or a mere alter ego of the settlor, as this could have legal implications.

In most cases, an express active trust can be revoked or amended by the settlor as long as they have the mental capacity to do so. However, the trust document should clearly outline the conditions and procedures for revocation or amendment.

If the trustee breaches their duties, beneficiaries or interested parties can take legal action to hold the trustee accountable. This may involve seeking removal of the trustee, recovering damages, or requesting a court order to enforce the terms of the trust.

In general, assets held in an express active trust are protected from the settlor’s creditors. However, if the trust was created with the intent to defraud creditors or if the settlor retains too much control over the trust assets, a court may disregard the trust and allow creditors to access the assets.

In some cases, beneficiaries may have the ability to sell or transfer their interest in an express active trust. However, this depends on the specific terms of the trust document and any applicable laws or restrictions.

Yes, an express active trust can be used for tax planning purposes, such as minimizing estate taxes or providing for charitable giving. However, it is important to consult with a tax professional or attorney to ensure compliance with relevant tax laws.

Yes, one of the advantages of an express active trust is that it can help avoid probate. By transferring assets to the trust during the settlor’s lifetime, those assets can be distributed to beneficiaries without going through the probate process, which can be time-consuming and costly.