What is a Contract Trust ?
Feb 03, 2023A contract trust is a type of trust that is created by a contract between the settlor (the person establishing the trust) and the trustee (the person or entity responsible for administering the trust). A contract trust can be used for a variety of purposes, including estate planning, asset protection, and tax planning.
In a contract trust, the settlor transfers ownership of property or assets to the trustee, who holds and manages the property for the benefit of one or more beneficiaries. The terms and conditions of the trust are set out in a contract that is binding on both the settlor and the trustee. The contract may specify the purpose of the trust, the powers of the trustee, the distribution of trust assets, and other important terms.
A contract trust can be a flexible and customizable way to manage property and assets, as the terms and conditions of the trust can be tailored to meet the specific needs and goals of the settlor. Contract trusts are also typically governed by the laws of the jurisdiction in which they are established, which can provide additional protections and benefits to the settlor and the beneficiaries.
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