What is a trust agreement?

A trust agreement is a legal document that establishes a trust. A trust is a fiduciary relationship in which one party, the trustor or settlor, transfers property to a separate party, the trustee, to manage it for the benefit of a third party, the beneficiary. A trust agreement defines the terms and arrangements of the trust and the rights and responsibilities of the parties involved. In Minnesota, a trust agreement must include certain terms, such as the name of the trust, the names of the settlor, trustee, and beneficiary, the purpose of the trust, and the rules for how the trust will be managed, including instructions on how assets are to be allocated and distributed. The trust agreement may also specify how the trust may be amended and terminated. Trust agreements can be used for a variety of estate planning purposes, including protecting assets from creditors and avoiding probate. In addition, certain types of trusts can provide tax benefits. Trusts are governed by state law, so it is important to work with an attorney who is familiar with the trust laws in Minnesota to ensure your trust agreement is properly executed.

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