What is a Trust?
A
Trust, generally, is a legal entity that can hold title to property.
There are three parties to a Trust agreement: the Trustmaker who creates
the Trust, the Beneficiary who receives the benefit of the property
held in the Trust, and the Trustee who manages the Trust. The property
that is transferred to and held by the Trust becomes the Trust
principal. If you create a Trust within your Will, it is called a
Testamentary Trust. If you create a Trust while you are alive, it is
called an inter vivos or Living Trust.
While you are alive,
you usually will receive all the income of the Trust and as much of the
principal as you request. Upon your death, the Trust assets are
distributed to your Beneficiaries in accordance with your directions
contained in the Trust agreement, or it can continue for specified
purposes for a period of time.
The Advantages and Disadvantages of a Trust
The Main Advantages of a Living Trust: