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What is Directory Trust? A Comprehensive Legal Overview
Definition & Meaning
A directory trust is a type of trust that is generally outlined by a trust document but lacks specific details in its initial creation. The trust's purpose is defined broadly, and it is typically funded and managed according to specific directions provided later. In some cases, a directory trust may also refer to a trust where the trustee is not permitted to exercise discretion over managing the trust or distributing its assets.
Table of content
Legal Use & context
Directory trusts are relevant in various areas of law, including estate planning and trust law. They are often used to provide a framework for managing assets without the need for ongoing decision-making by the trustee. Users may find legal forms related to directory trusts useful for establishing or modifying such trusts, which can be managed with the help of templates offered by US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
Example 1: A family establishes a directory trust to manage their assets for future generations. The trust document specifies the general purpose of education funding, but detailed instructions on fund allocation are provided later as needs arise.
Example 2: A charity sets up a directory trust where the trustee is required to distribute funds for specific projects without discretion on how to allocate resources (hypothetical example).
State-by-state differences
Examples of state differences (not exhaustive):
State
Key Differences
California
Allows for specific provisions in trust documents to clarify trustee responsibilities.
New York
Requires certain disclosures to beneficiaries regarding trust management.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Living Trust
A trust created during a person's lifetime to manage their assets.
Living trusts typically allow for more flexibility and discretion by the trustee.
Testamentary Trust
A trust that is created through a will and comes into effect after death.
Testamentary trusts are not funded until the individual passes away, unlike directory trusts.
Common misunderstandings
What to do if this term applies to you
If you are considering establishing a directory trust, it is advisable to consult with a legal professional to ensure that your trust document is properly drafted and meets your needs. Additionally, you can explore US Legal Forms for templates that can help you create or modify a directory trust effectively.
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