          
          
          
          Trust Creation:
          
          
               In the usual situation, the person who creates a
          trust (variously called the "donor," "grantor" or
          "settlor") conveys legal title "in trust" to a body of
          his or her real or personal property or money (the
          "corpus") to a third party, (the "trustee"), perhaps a
          close friend, professional financial manager or a bank
          trust department, to be managed or invested by that
          trustee for the benefit of a named person or persons,
          the "beneficiary."  Thus the burdens of property
          ownership and management fall to the trustee, while the
          benefits go to others, the beneficiaries.
               The act of trust creation immediately transfers
          the legal title and absolute ownership of the trust
          property or "corpus" from the grantor to the trust. 
          Assuming there is no fraudulent intent, this means the
          grantor's creditors cannot reach the transferred
          assets.  Control of these trust assets henceforth is
          vested in the trustee, so long as the trust exists. 
          The trustee's powers and duties can be broad or narrow,
          according to the terms of the trust declaration, the
          basic "master plan" authorizing and creating the trust,
          but they should carefully reflect the grantor's
          intentions as to how the objectives of the trust are to
          be achieved and how it is to operate.
               The grantor may also be the trustee, or one of the
          trustees, but such an arrangement imposes a strict duty
          against self-dealing and conflict of interest, lest the
          validity of the trust itself be called into question by
          creditors, tax authorities or the courts.  In almost
          every instance it is better to avoid potential legal
          challenges by not having the trust grantor act as
          trustee.  This appropriate distance between grantor and
          trust is not absolute, since the grantor can retain the
          right to designate or change the trustee at will.  The
          grantor may also be a beneficiary of the trust.
               Trust beneficiaries receives only an equitable
          title to the income or assets of the trust, but this
          allows them to seek judicial intervention as a matter
          of right if there is reason to believe the trust is
          being administered improperly or the assets dissipated.
          
          
          
