A trust is a written agreement that sets forth who will manage the assets in it during your lifetime, in the event of your incapacity, and upon your death. It allows you to transfer the legal title of your property to a trustee—either another person or yourself—and is often a more cost-effective alternative to a will.
Think of a trust as a holding pen, if you will, a place where you put your assets before they are released to the people or organizations that you designate to eventually receive them. A trust is a legal entity and so are you. Because you and the trust are separate legal entities, anything you transfer from you to the trust becomes property of the trust. The trust then holds the property for your benefit, or for the benefit of those whom you designate.
Trusts can be set up while you are alive (the legal term for this is intervivos), or they can be established upon your death by your will (known as testamentary). Revocable trusts can be changed or revoked by the grantor. Irrevocable trusts cannot be changed once they are created.
AUTHOR: Joan Yuhas McGowan
MORE INFO: Excerpted from "Wills and Trusts: Planning for the Future"
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