What is a Contract Law Trust?

A contract-law trust is a type of complex trust that is primarily based on a private contract between the grantor and trustee, rather than statutory law, and is used for estate and tax planning. This "pass-through" agreement allows the trustee to hold assets for the beneficiary, offering privacy and flexibility in how and when assets are distributed. The contract-based nature of these trusts, such as a spendthrift trust, can provide significant asset protection, making them difficult for creditors to seize, and can supersede public statutes in some cases.