What's more, this amount is exempt from taxation in his estate. Not only has Brian found a way to receive professional management for his assets and the peace of mind of a steady income, he's also making a substantial gift to support a cause he believes in. The Technical Talk A trust is a legal relationship established by a grantor whose property is managed according to the terms of the trust document. Those terms state how the trust will be handled, for how long, and for whose benefit. A trust is governed by federal and state law and by the trust document.
Trusts can be revocable or irrevocable.
With a revocable trust, the grantor can modify the trust agreement or even cancel it, taking back the property that was placed in the trust. The trustee can be changed at any time. Restrictions that turn out to be impractical can be altered or eliminated. An irrevocable trust, by contrast, cannot be canceled or changed. One of the chief reasons for creating an irrevocable trust is to transfer assets while saving taxes.