Structure of a Trust Settlement

Settlements of legal trusts

A trust is a legal document that holds property and grants a third-party control over the property for another person. The method of property distribution, referred to as a settlement, is determined by the individual establishing the trust.

Later Date Distribution

Property held in trust can be distributed a specified number of years later. The most common example of this type of trust settlement is when the trust states that its property is to be distributed on a given date, such as the recipient's 30th birthday.

Interest Distribution Followed by Dissolution

A trust's settlement directions can also require that the recipient only receive any interest earned on the trust property during the recipient's lifetime. Typically, upon the death of the recipient, the trust automatically dissolves and is distributed to other parties.

Distribution Upon Death

Because a trust can exist during the establishing party's lifetime, it can also be settled upon the establishing party's death. In this type of trust, recipients receive the trust property upon the death of the establishing party.