WHAT IS A TRUST?
A trust is a legal arrangement under which you, as the grantor, transfer money or other property to a trustee. The trustee will hold and eventually distribute the property for the benefit of one or more beneficiaries. A trust agreement is used to create the trust. It names a person or institution as trustee to manage the property placed in the trust. It gives the trustee instructions concerning the management and distribution of the property. Trusts can be broadly categorized as either testamentary trusts or living trusts. A testamentary trust is created within a Will and takes effect only at death. A living trust is a trust that you put in place during your lifetime.

This page explains living trusts and how they can be used in estate and financial planning. For information on testamentary trusts, please see Common Questions about Wills or Credit Shelter Trusts.

TYPES OF LIVING TRUSTS
Living trusts can be revocable or irrevocable. With a revocable trust , you retain the ability to change or revoke the trust. With an irrevocable trust , you surrender that power and generally do not benefit from the trust's income or principal. The revocable living trust is generally chosen when the goal is to avoid probate of your estate. The irrevocable living trust is typically chosen where the goal is to avoid income or estate taxes.

CHOOSING YOUR TRUSTEE
When setting up any trust, one of your most important decisions is choosing a trustee.

CONCLUSION
The protection, advantages, and possible tax benefits that living trusts can provide make them extremely valuable estate planning tools. When planning for the security of your family, consider how a living trust can fulfill your needs and objectives. Let the Law Firm of Evan H. Farr, P.C. help you determine if a living trust is right for you. See Wills, Trusts, and Estate Planning for more information.

This Web site provides general information only. Laws develop over time and differ from state to state. This Web site does not provide legal advice about specific legal problems. Let The Law Firm of Evan H. Farr, P.C. advise you about your particular situation.