What is required to create a trust?

• A. Intent to create a trust, trust property, and one or more trust beneficiaries.
• B. Delivery of trust property to the beneficiary.
• C. A written formal instrument with notarization.
• D. A will or testament only.

Answer: (A)

A trust is created when there is clear intention to set up a trust, there is property to place into the trust, and there is a beneficiary or beneficiaries who can enforce the trust. The intention shows the settlor wants the property held for others rather than simply giving it away; the trust property is what will be held by the trust; and the beneficiary(s) are the people or entities who will benefit from the arrangement. Without any one of these elements, a valid trust generally cannot exist.

Delivering the property directly to a beneficiary isn’t the typical way a trust is formed—the property is usually transferred to a trustee to hold in trust for the beneficiary. A written instrument with notarization isn’t always required—trusts can arise from informal arrangements in some contexts, and notarization isn’t universally necessary. Finally, a will can create a trust only after death (a testamentary trust) and isn’t the sole or universal way to form a trust during life.