What is required to create a lifetime trust?

• A. An oral agreement between the grantor and trustee
• B. Delivery of corpus to the trustee, intent to create a trust, and at least one definite beneficiary not the trustee
• C. No writing is required if the grantor is alive and wishes to transfer property
• D. Only a verbal agreement with a witness present

Answer: (B)

A lifetime trust becomes valid only when three things come together and the property is actually placed into the trust. First, there must be a present intent to create a trust—the grantor must intend that the property be held and managed for someone else under defined terms. Second, there must be property placed into the trust, known as the corpus, which means the grantor delivers the property to a trustee so the trustee can manage it for the benefit of the beneficiaries. Third, there must be a definite beneficiary who is not the trustee, so the beneficiary has enforceable rights and the trustee owes duties to someone other than themselves.

Delivery of the corpus to the trustee shows the grantor has relinquished control and funding the trust, which moves the arrangement from a mere promise or custodial arrangement into a funded trust. Without that delivery, there is no trust property to manage. Without clear intent, it’s not a trust at all. Without a definite beneficiary, there’s no one to enforce the trust and the arrangement could collapse into an improper or self-dealing setup.

So the combination of funding the trust (delivery of the corpus), the grantor’s intent to create a trust, and a definite beneficiary other than the trustee is what makes a lifetime trust valid. The other scenarios fail because they omit one or more of these essential elements: mere oral promises, lack of funding, or no identifiable beneficiary do not establish a proper trust.