Taxation & Estate Planning

Trusts and Consideration (why $10?)

By Joel A. Schoenmeyer

I got this question twice in one day, so that's probably a sign from someone that I should answer it: Why do trust documents typically recite that the trust creator (sometimes known as the grantor) has transferred $10 (or some other sum) to the trustee?

The answer is that a trust cannot exist without assets. The trust must contain something (known as the trust corpus) in order to be a valid trust. Of course, this is a bit of a silly rule, especially when the grantor and the trustee are the same person. Do you take $10 from one pocket and put it into a different pocket?

Full post as published by Death and Taxes Blog on March 05, 2010 (boomark / email).