What is a trust agreement?

A trust agreement is a legal document that outlines the management and distribution of assets held within a trust. In Washington, establishing a trust involves creating a trust agreement and transferring property into the trust. A trust agreement outlines the power given to the trustee, the person responsible for managing trust assets. The document sets out how the trustee will manage the trust fund, including investment and distribution strategies. It also states how the trust fund can be used, who can benefit from the fund, how long the trust will last, and when distributions will occur. The trust agreement may also set out the rights of the beneficiary, the person who is intended to benefit from the trust. The trust agreement guarantees that the beneficiary will receive the trust assets, protects the property from creditors, and gives the trustee the authority to make decisions about the trust fund. The trust agreement is also important for tax purposes as it outlines the trust’s tax liability and how the trust should be reported. It may also be used to document any special instructions for the trustee, such as charitable donations or gifts to family members. Finally, the trust agreement will define the procedures for amending or terminating the trust and for appointing a successor trustee. By ensuring that the trust agreement is properly written and maintained, beneficiaries can be sure that the trust fund will be managed in accordance with their wishes.

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