A trust is an estate-planning device frequently used to manage the distribution of a person's estate.

Mechanics of a Trust
To create a trust, the owner of property (grantor) transfers the property to a person or institution (trustee) who holds legal title to the property and manages it for the benefit of a third party (beneficiary). The grantor can name himself or herself or another person as the trustee. A trust can be either a testamentary trust or a living trust. A testamentary trust transfers the property to the trust only after the death of the grantor. A living trust, sometimes called an inter vivos trust, is created during the life of the grantor and can be set up to continue after the grantor's death or to terminate and be distributed upon the grantor's death.

Unlike a will, which in some cases can be drafted without the help of an attorney, a trust should never be drafted without the aid of a lawyer. Many complex laws regulate trusts. Trusts must be carefully structured if they are to take into account the size and composition of the estate and take advantage of beneficial tax laws. An experienced attorney should always assist in drafting a trust so that it is valid, meets the needs of the estate, and does not conflict with any previously drafted will.

Advantages and Disadvantages of a Trust
Trusts have many advantages over wills. The advantages depend on whether a living trust or testamentary trust is chosen. All trusts have the advantage of allowing the grantor to determine who receives the benefit of the money, when it is received, and what conditions must be met. If a spouse is unable or unwilling to manage assets, if children are minors or are unable to handle money responsibly, or if a beneficiary is disabled, creating a trust can be a better way of passing on assets. Creating a living or testamentary trust is an especially popular way of providing for beneficiaries' future educational or medical costs.

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