This is a generic term encompassing a variety of trusts created by persons for the benefit of their family members. In fact, most trusts used in estate planning are family trusts, including spousal trusts. A typical family trust may hold property in trust for a parent and his/her spouse during their lifetimes, with the remainder of trust capital going to the children. During the parent’s lifetime, the trust might provide for the trust’s income to be distributed to the beneficiaries in a predetermined manner, or as determined in the discretion if the trustees. The trustees would normally include the parent, perhaps the spouse, and an independent third party (e.g., aunt, uncle, and lawyer). Family trusts also include testamentary trusts, those created on a person’s death for the benefit of his/her family members.
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