What is a trust?
A trust is a legal arrangement where one person holds and manages property for the benefit of another, under written terms.
A trust is an arrangement where a trustee holds property for the benefit of others.
Where the word "Trust" comes from
Trusts developed in English equity law as a way to separate legal ownership from the enjoyment of property. The trustee holds legal title while the beneficiary holds the right to benefit, a structure that became the foundation of modern estate planning.
Why Trust matters
Trusts let you control how, when, and to whom property passes, avoid probate, protect assets from creditors in some cases, and provide for beneficiaries who cannot manage money themselves. That flexibility is why trusts are central to estate planning.
Common confusion about Trust
A trust is not only for the wealthy. Even modest estates use revocable living trusts to avoid probate and keep financial affairs private, because a trust document, unlike a will, does not become a public court record.
A real-world example of Trust
A grandmother creates a trust for her grandson's education, naming a bank as trustee. The bank invests the money and pays tuition from it, following the trust's instructions, and the grandson cannot touch the principal for other purposes.
A worked example of Trust
A couple creates a revocable living trust and transfers their home and investments into it. They serve as their own trustees while alive, and the trust names their children as successor trustees and beneficiaries. At their deaths, the successor trustee distributes the assets to the children without probate, saving time and keeping the details private, because the trust document, not a court, directs the transfer.
How Trust works in practice
If you create a trust, fund it by retitling assets into the trust's name, because an unfunded trust accomplishes nothing. Choose a trustee you trust to follow instructions and manage money, and name a successor. Review the trust periodically, and coordinate it with your will, beneficiary forms, and powers of attorney so the whole plan works together.
Questions about Trust
Do I still need a will?
Often yes, to catch assets left out of the trust.
Who controls a trust?
The trustee, for the beneficiaries’ benefit.
Is a trust public?
Generally no — trusts avoid the public probate record.
What is the difference between a trustee and a guardian?
A trustee manages property; a guardian cares for a person.