A parol trust, also known as an oral trust, is a type of trust established through the spoken words of the settlor, rather than through a formal written agreement. This trust typically applies to personal property and can be created without the need for documentation. The settlor's verbal declarations are essential in defining the trust's terms and intentions.
Parol trusts are primarily used in estate planning and personal property management. They are relevant in various legal areas, including:
While parol trusts can be established without formal documentation, it is advisable to utilize legal templates or forms to ensure clarity and compliance with state laws. Users can find resources through platforms like US Legal Forms to create these documents effectively.
Here are a couple of examples of abatement:
Example 1: A person verbally tells their friend that they want them to take care of their antique collection after they pass away. This verbal agreement may establish a parol trust for the antiques.
Example 2: A parent informs their child that they wish to leave their car to them upon their death. If the parent clearly expresses this intention, it may constitute a parol trust for the vehicle. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Notes |
|---|---|
| California | Parol trusts are recognized but may require evidence of intent. |
| New York | Oral trusts for personal property are generally valid but can be challenged. |
| Texas | Verbal trusts are accepted, but clear communication is crucial. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Written Trust | A trust established through a formal written document. | Requires documentation; more legally binding. |
| Implied Trust | A trust created by the actions of the parties involved. | Based on behavior rather than explicit statements. |
If you believe a parol trust may apply to your situation, consider the following steps:
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Yes, parol trusts can be contested, especially if there is ambiguity in the settlor's intent.