An illusory trust is essentially a trust that doesn’t exist since the trustor retains so much control. A trust is set up for the benefit of the trustees and beneficiaries, and although someone may claim to have a trust, if it doesn’t hold up under the legal terms of a trust, it is an illusory trust.

The term illusory trust comes up in court at times when an individual tries to hide assets or say that she has a trust for certain tax benefits. A judge may determine that an illusory trust situation exists in order to award the assets of the trust to the appropriate parties or to force the drafting of an appropriate trust for that particular situation. An illusory trust is:

1. A term used to describe a trust that does not fit the definition of a trust.

2. A trust where the trustee retains so much control that an illusory trust doesn’t exist.

3. A trust that's essentially an illusion, even though claimed to be a proper trust.

Action Steps
The best contacts and resources to help you get it done

Get illusory trust advice and illusory trust information from a trust expert

Illusory trusts is a term used to describe a trust that doesn't exist, so there are no illusory trust documents. If you find yourself in a situation where there is a dispute over the terms of a trust, an illusory trust may exist. Get more information from an estate planning attorney in your area to see if your situation falls under the terms of illusory trust.

I recommend: Use both Legalmatch.com or Attorneyfind.com by clicking on your state and "Trusts and Estates" for areas of practice to find a trust expert where you live.

Read cases where an illusory trust exists to understand more about illusory trusts

There are case examples where individuals have an illusory trust. Doing your homework ahead of time helps an illusory trust expert determine if the illusory trust applies to your situation.

I recommend: Use JStor, Trusted Archives for Scholarship, and Findlaw, Cases and Codes for examples of illusory trust cases.

Work with a trust attorney to determine if an illusory trust exists

During life's most difficult moments, getting the right answers before you need them is priceless. The term illusory trust can be confusing without the right expert services on your side. Choosing a qualified trust and estate attorney takes the worry out of making the right choices for your particular situation.

I recommend: Dorsey & Whitney and McDermott Will & Emery are global law firms with large estate planning and trust divisions to address all your trust-planning needs.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Because an illusory trust is a situation and not a type of trust, appropriate legal council is necessary to get the right result for your case.
• •  Because an illusory trust is not an actual trust there are no programs to create illusory trust documents or any need for illusory trust management.