Kinds of Trusts

A trust is a legal arrangement through which one person (or an institution, such as a bank or law firm), called a "trustee," holds legal title to property for another person, called a "beneficiary."

Trusts fall into two basic categories: testamentary and inter vivos.

A testamentary trust is one created by your will, and it does not come into existence until you die. In contrast, an inter vivos trust starts during your lifetime. You create it now and it exists during your life.

There are two kinds of inter vivos trusts: revocable and irrevocable.

Revocable trusts

Revocable trusts are often referred to as "living" trusts. With a revocable trust, the person who created the trust, called the "grantor" or "donor," maintains complete control over the trust and may amend, revoke or terminate it at any time. This means you can take back the funds you put in the trust or change its terms, so you can reap the benefits of the trust arrangement while keeping the ability to change your mind.

Irrevocable trusts

An irrevocable trust generally cannot be changed or revoked once it is created. In exchange for giving up that control, an irrevocable trust can offer protection from creditors, help with long-term care planning and, in some cases, reduce taxes.

Which kind of trust is right for you depends entirely on your goals. Contact the office and we will walk through the options together.