A trust is a separate legal entity that holds property or assets of some kind for the benefit of a specific person, group of people or organization known as the beneficiary/beneficiaries. The person who creates a trust is called the grantor, donor or settlor. When a trust is established, an individual or corporate entity is named to oversee or manage the assets in the trust. This individual or entity is called a trustee. A trustee can be a professional with financial knowledge, a relative or loyal friend or a corporation. More than one trustee can be named by the grantor.

There are two basic forms of trusts: after-death (or testamentary) and living (or inter vivos). Living trusts can be revocable or irrevocable. The most popular type of trust is the revocable living trust, which allows the individual to make changes to the trust during his or her life. Revocable living trusts avoid the often lengthy probate process but, by themselves, don’t provide shelter for assets from federal or state estate taxes.