Executed and Executory Trust & it's Differences

Executed trust:

An executed trust typically refers to a trust that has been fully set up and administered according to the terms of the trust document. This means that the assets have been transferred to the trustee. The trust has a trustee and beneficiaries, and the trust is being managed according to the instructions outlined in the trust document.

An executed trust is a legal instrument that can be used to manage and distribute assets, such as property, cash, or investments, for the benefit of the beneficiaries. It allows a person to transfer ownership of assets to a trustee, who is responsible for managing the assets according to the instructions in the trust document. This can include instructions on when and how the assets will be distributed to the beneficiaries.

Executory Trust:

An executory trust is a trust that is still in the process of being set up and has not yet been fully executed. It is a trust that has not yet been funded, meaning the assets have not yet been transferred to the trust.

An executory trust may be set up in a will, and the assets will be transferred to the trustee only upon the grantor's death. The terms of the trust will become effective only after the grantor's death, and the trust will be executed by the executor of the will. An executory trust can also be set up during someone's lifetime, but the assets are not yet transferred to the trust, and the trust is not yet operative.

Difference between Executed and Executory Trust:

The main difference between an executed and an executory trust is that an executed trust has already been fully set up, and its terms are being implemented, while an executory trust is still in the process of being established, and its terms have yet to take effect.

You Can Read Also:- 1) Trusts and its Classification

                                    2) Constructive and Resulting Trust