Trust
What Is a Trust?
A trust is a legal arrangement that holds and manages assets for someone else’s benefit. A trust allows one party to place money or property into a separate legal structure, with a trustee responsible for managing those assets for a beneficiary.
Trusts can hold many types of assets, including:
- Cash and bank accounts
- Investments
- Real estate
- Business interests
People use trusts for estate planning, protecting assets, and managing how money is distributed over time.
Why It Matters
A trust can give you more control over what happens to your money and property, especially when your situation is complicated or you want to protect someone you love.
Trusts can help:
- Provide structure for children or dependents
- Reduce family conflict by making your wishes clear
- Manage assets over time instead of all at once
- Support privacy and smoother transfers in many cases
Trusts are not just for the wealthy. They are tools for clarity and care.
How Trust Works
A trust works by moving assets into the trust and assigning a trustee to manage them under written rules.
Example: A parent sets up a trust for a child and directs the trustee to pay for tuition and living expenses until the child turns 25.
The trustee follows the trust terms and distributes assets as the trust instructs.
Trust vs Will
Trust → Manages assets inside the trust, often with more control over timing
Will → Distributes assets after death through the estate process
Both are common estate planning tools.
FAQs About Trust
Do you need a trust to pass on assets?
Not always, but a trust can offer more control and structure than a will alone.
Can a trust be used while you’re alive?
Yes. Many trusts are set up and managed during a person’s lifetime.
Can a trust hold a home?
Yes. Real estate is commonly placed into trusts.
Related Terms
