A declaration of trust is
- Usually a legal document
- Indicating a property/ asset is being held for the benefit of another person or individuals
- The trustee receives the asset and arranges the property as well as designated assets such as cash and securities into a trust
- An appointed trustee such as an individual or financial institution administers this trust in the best interests of beneficiaries as explained in the declaration of trust
A declaration of trust outlines:
- Who the trust is in benefit of
- Who can amend or revoke the trust (if it can be amended at all)
- Who will serve as trustee and what powers the trustee holds
- The statement also includes information regarding what is to happen if a beneficiary wants to receive distributions.
- It may also highlight details about the types of assets within a trust.
The declaration also presents the trust’s purpose or objectives and how the trustee may invest and manage assets to support beneficiaries. It also may explain who will replace the trustee in the event of illness, incapacitation, death or any other reason such as resulting legal action taken against the trustee.
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