They can help families meet a variety of estate planning objectives, such as avoiding probate or reducing probate costs, providing property management for a surviving spouse or children, giving children their inheritance over a period of time, providing for incapacity, reducing death or income taxes, naming a guardian for minor children, or contributing to a favorite charity. Put another way, it is an arrangement whereby someone holds legal title to and manages property for the benefit of someone else. A trust is an artificial being, generally created by a written document or instrument. Although not recommended, a person can create an oral, non-written trust for personal property simply by declaring that the property is being held in trust for the benefit of someone. Trusts involving real property or that are created by will must have written instructions.
Trusts can be simple or complex.
Generally, the more complex the trust and the higher the value of the property in the trust, the greater the legal and other fees involved in setting it up. The grantor is the person setting up the trust. This person is sometimes referred to as the settlor or trustor. The law allows the person making the trust to write into it almost any directions, conditions, and restrictions desired. The grantor may give the trustee broad and sweeping powers such as those that might be needed if the trustee is to manage a farm or other business or leave the trustee very little room for decision making.