Technical trust, also known as a passive trust, is a type of trust where the trustee's role is limited to holding the title to the property. In this arrangement, the trustee does not actively manage the assets or make decisions regarding them. The primary focus is on the ownership aspect, allowing the beneficiaries to benefit from the assets without the trustee's intervention.
Technical trusts are commonly used in estate planning and asset management. They can simplify the transfer of property and ensure that assets are held for the benefit of designated individuals or entities without requiring ongoing management. This type of trust is relevant in various legal areas, including:
Users can manage technical trusts with the right tools, such as legal templates from US Legal Forms, which are drafted by real attorneys to ensure compliance with applicable laws.
Here are a couple of examples of abatement:
Example 1: A parent establishes a technical trust for their child, where the child is the beneficiary. The parent, as the trustee, simply holds the title to the property until the child reaches a specified age.
Example 2: An individual creates a technical trust to hold investment properties. The trustee does not manage the properties but ensures they are titled correctly for the benefit of the beneficiaries. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Allows for specific provisions regarding the management of passive trusts. |
| New York | Has distinct rules about the taxation of trust income. |
This is not a complete list. State laws vary and users should consult local rules for specific guidance.
| Term | Definition | Difference |
|---|---|---|
| Active trust | A trust where the trustee actively manages the assets. | Unlike technical trusts, active trusts require ongoing management. |
| Revocable trust | A trust that can be altered or revoked by the grantor. | Technical trusts are typically irrevocable and do not allow changes once established. |
If you find that a technical trust may be relevant to your situation, consider the following steps:
For complex situations, seeking professional legal assistance is recommended.
Browse our library of 85,000+ state-specific legal templates.
| Attribute | Details |
|---|---|
| Typical fees | Varies by state and complexity of the trust. |
| Jurisdiction | State-specific laws apply. |
| Possible penalties | Non-compliance with state laws may result in legal issues. |
The trustee's primary role is to hold the title to the property without actively managing it.