What Is a Trust in Estate Planning? | Trust Attorney Explains
Learn what a trust is, how it works, and whether it’s the right tool for your estate plan. Discover the benefits of trusts from an experienced estate planning attorney.
What Is a Trust?
When it comes to estate planning, trusts are one of the most powerful and flexible tools available. But what exactly is a trust — and do you need one?
Let’s break it down in simple terms.
Definition: What Is a Trust?
A trust is a legal arrangement in which one person (the trustee) holds and manages property for the benefit of another person (the beneficiary). The person who creates the trust is called the grantor or settlor.
Think of it like a secure box for your assets — one where you decide:
- What goes inside
- Who manages it
- Who gets it, and when
There are many different types of trusts, each designed to accomplish different goals.
Types of Trusts
- Revocable Living Trust
- Can be changed or revoked at any time by the grantor.
- Often used to avoid probate and maintain privacy.
- Assets in the trust pass directly to beneficiaries upon death, without court involvement.
- Irrevocable Trust
- Cannot be changed once created (with limited exceptions).
- Often used to reduce estate taxes, protect assets from creditors, or qualify for Medicaid.
- Testamentary Trust
- Created through your will and takes effect after death.
- Useful for managing assets for minor children or beneficiaries who need oversight.
- Special Needs Trust
- Protects a disabled person’s eligibility for government benefits while providing supplemental support.
- Charitable Trust
- Allows you to support a charitable cause while also gaining potential tax advantages.
Why Use a Trust?
Here are a few reasons people include trusts in their estate plans:
- Simplify Probate: Assets in a trust pass directly to beneficiaries without needing probate court approval.
- Maintain Privacy: Wills become public after death — trusts do not.
- Provide Control: You can set specific rules for how and when assets are distributed (e.g., over time, at certain ages, or for specific purposes).
- Protect Beneficiaries: Trusts can shield assets from creditors, lawsuits, or even a beneficiary’s own poor spending habits.
- Reduce Taxes: Certain trusts can minimize or eliminate estate taxes for large estates.
Do You Need a Trust?
Not everyone needs a trust — but many people benefit from having one. You might consider a trust if:
- You want to avoid probate
- You have minor children or dependents
- You own property in multiple states
- You have concerns about incapacity
- You want to protect or control how assets are used
A trust is a versatile legal tool that offers privacy, control, and protection — and it can be customized to fit your specific goals. Whether you’re looking to simplify inheritance, care for a loved one, or shield your estate from taxes and probate, a trust might be the right fit.
Wondering whether a trust makes sense for your situation? Our estate planning attorneys can walk you through your options and help you create a plan that meets your goals. Contact us today for a personalized consultation – Call 203-885-0500.