The term trust describes the holding of property by a trustee in accordance with the provisions of a written trust instrument for the benefit of one or more persons called beneficiaries. A trust created by a will is called a testamentary trust and the trust provisions are contained in the will.
Trusts created during a person’s lifetime are called living or inter vivos trusts. The provisions of the trust (rather than the will or state law intestacy rules) will be used to determine what happens to the property in the trust upon the person’s death. Living trusts are perhaps the most common vehicle used to avoid the probate process.
Trusts are not only for the wealthy. Many young parents with limited assets choose to create trusts either during life or in wills for the benefit of their children in the event both parents die before all their children have reached an age deemed by them to indicate sufficient maturity to handle property.