A Hybrid Trust is a combination of a discretionary trust and a fixed trust. In this type of trust, a fixed percentage of the trust’s property is paid out to any number of multiple beneficiaries, as designated by the settlor. However, once those fixed amounts have been given to the beneficiaries, the remaining assets will be distributed to the beneficiaries according to the discretion of the trustee.
An Implied Trust is somewhat removed from an express trust insofar as some of the original legal requirements of the express trust were not met. Yet, there is a presumption of the settlor’s intentions of creating that trust. A ruling is made, in light of the improperly drafted express trust, and a resulting trust is assumed to be in place, for the benefit of the settlor.
An Incentive Trust is normally used to either encourage behavior or discourage the beneficiary from engaging in certain behavior. This is different from a discretionary trust in that the settlor stipulates the behavior to be encouraged or discouraged and does not leave those decisions up to the trustee.
A Living Trust (or an Inter Vivos Trust) merely designates a trust that is established while the settlor is still living.
An Irrevocable Trust contains terms that cannot be revised until the original purpose of that trust has been completed. However, there are cases when a court can make changes to the trust, should circumstances arise that make the execution of that trust impossible or non-viable economically. This usually only occurs in rare situations.
An Offshore Trust is a trust that is created and resides in a jurisdiction that is different from the jurisdiction that the settlor resides in. This type of trust is usually made in an offshore financial centre (also known as tax havens). Trusts that are created in an offshore jurisdiction are the same as the trusts that are created “onshore”. However, the trust may benefit from certain tax advantages granted by the laws of the offshore country that is housing the trust.
Public and Private Trusts designate trusts that benefit either individuals (private trusts) or public institutions (public or charitable trusts). For an organization to qualify for a charitable trust, it must provide proof that the purpose of the organization is within certain legislative guidelines (such as religious or educational objectives). Public trusts, that qualify, can usually benefit from certain tax advantages.
Please note that this article is for informational purposes only and is not intended as legal advice.
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