An Informative Overview Package
Clarity, structure & control over assets during life and after death.
Purpose of This Package
This document explains what trusts are, why they are used, how they function, and which types are most commonly established. It is designed for individuals, families, entrepreneurs, and property owners who want clarity, structure, and control over assets during life and after death.
What Is a Trust
A trust is a legal arrangement in which one party places assets under the control of another party for the benefit of one or more beneficiaries. The trust separates ownership, control, and benefit, allowing assets to be managed according to clearly defined instructions. A trust exists as its own legal entity once properly created and funded.
The Three Core Roles in a Trust
- Grantor (Settlor) — The person who creates the trust and places assets into it.
- Trustee — The person or institution responsible for managing the trust assets according to the trust document.
- Beneficiary — The individual or organization that receives benefits from the trust.
One person may hold multiple roles, depending on the trust type.
Why People Use Trusts
Trusts solve problems that wills and simple ownership cannot:
- Avoid probate
- Maintain privacy
- Control how & when assets are distributed
- Protect assets from mismanagement
- Plan for incapacity
- Reduce estate complications
- Provide business / property continuity
- Protect beneficiaries with special needs
- Create long-term generational plans
A trust is not about wealth alone. It is about control, protection, and clarity.
Trusts vs Wills
A will distributes assets. A trust manages assets. Most plans use both, but the trust carries the weight.
Common Trust Types
Revocable Living Trust
Key: Created during life; grantor can change/revoke; grantor often serves as trustee; assets avoid probate; becomes irrevocable at death.
Best for: Families, property owners, business continuity, privacy.
Irrevocable Trust
Key: Assets permanently transferred; grantor gives up control; strong asset protection.
Best for: Asset protection, Medicaid/LTCI planning, advanced tax strategies.
Testamentary Trust
Key: Created via will; effective only after death; subject to probate.
Best for: Parents with young children.
Special Needs Trust
Key: Funds supplemental needs only; preserves SSI & Medicaid.
Best for: Beneficiaries with disabilities.
Charitable Trusts
Forms: Charitable Remainder Trust, Charitable Lead Trust.
Best for: Philanthropy, tax planning, legacy giving.
Land Trusts
Key: Holds real-estate title; beneficiary remains private.
Best for: Real-estate investors, privacy-focused ownership.
Business Trusts
Key: Holds business interests; succession & continuity planning.
Best for: Family businesses, investment entities.
How a Trust Is Created & Funded
- Written trust agreement names the trust, trustee, beneficiaries, assets, and rules.
- Trust must be funded—assets retitled into the trust name.
An unfunded trust does nothing. Common assets: real estate, bank & investment accounts, business interests, IP.
Trustee Responsibilities
- Manage assets prudently
- Follow trust terms exactly
- Keep records & make proper distributions
- Avoid conflicts of interest
Common Misconceptions
- A trust does not automatically reduce taxes.
- It does not remove the need for planning.
- It does not protect assets unless designed to do so.
- It is only effective if funded correctly.
Trusts are tools. Results depend on design.
When a Trust Is Especially Important
- Real estate in multiple states
- Privacy desired
- Minor children
- Controlled distributions needed
- Business ownership
- Incapacity planning
- Probate avoidance
Final Perspective
A trust is not a document. It is a system of control. When designed correctly, it provides stability during life, clarity during incapacity, and certainty after death—replacing court decisions with your own instructions.