Most people are familiar with trusts that are used to make lifetime gifts, commonly referred to as “irrevocable trusts”, or trusts that are used to avoid probate, commonly called “living trusts” or “revocable trusts.” There are many other kinds of trusts, one of which is called a “purpose trust”.

A purpose trust is created to carry out a specific non-charitable objective rather than benefiting individuals. For example, if you have a pet that you want to provide for after your death, you may leave money in a “pet trust”. Your pet trust is not for the benefit of individuals and does not benefit a charity. Rather, it is mechanism for caring for your pet (or pets) after your death.

Another example of a purpose trust is where you leave money in a trust to maintain a grave site in perpetuity.

These purpose trusts have no beneficiary who can enforce the trust. Historically, trust law required that there be some person who could enforce the trust. A few states have passed laws to specifically authorize purpose trusts. Kentucky has not passed a law specifically authorizing purpose trusts. However, many years ago, in the case of Street v. Cave Hill Investment Company, 230 S.W. 536 (Ky., 1921), the Kentucky Supreme Court held that a gift in a Will to maintain a grave market in perpetuity was a valid bequest.  Therefore, even though Kentucky does not have a specific statute on the subject, it is likely that a gift in your Will or Trust for your pet or for maintaining a grave site would be considered valid under Kentucky law.

There are other kinds of trusts that may not meet the strict definition of a purpose trust because they benefit individuals, like your family. They are sometimes referred to as purpose trusts because they are used for a specific purpose. For example, you may want to create a trust to hold firearms. These trusts are typically used to avoid problems with registration of the firearms. A firearm trust will typically benefit certain individuals, such as the owner’s children and grandchildren, so they are not strictly a purpose trust.

Other examples would be trusts to hold vacation property like a timeshare or to hold a Derby box.

What about a trust to hold your wine collection, a doll collection, train set, or similar items?

What is going to happen to your basketball or football season tickets at your favorite university if you don’t leave any instructions? Many universities have a policy that you can only transfer your season tickets one time. So if you die and your wife takes the tickets in her name, and then she dies, the tickets may have to returned to the university. Your children may never be able to get comparable seats.

All of these special assets can be preserved and protected the way that you want if you leave detailed instructions. One of the keys to an estate plan that works is discovering what is important to you and your loved ones. These are just a few examples of things that most clients don’t think about. So next time you review your plan, spend some time thinking about whether you have some special items that need instructions, whether it’s taking care of your pets or keeping your Derby box in the family.