A trust is a legal arrangement in which a person, known as the grantor, gives property to a trustee to manage for the benefit of the trust’s beneficiaries. The grantor can also be a trustee and a beneficiary of the trust, but there must always be at least one other beneficiary.

Trusts can play an important role in estate planning by helping you to transfer your assets to your loved ones in a way that minimizes taxes and avoids probate. Trusts can also provide for the management of your assets during your lifetime and after your death, and they can help protect your assets from creditors and lawsuits.

Some common types of trusts used in estate planning include revocable living trusts, irrevocable living trusts, testamentary trusts, and special needs trusts. Each type of trust has its own advantages and disadvantages, and the right type of trust for you will depend on your individual circumstances and goals.

Trusts can help minimize taxes in several ways. For example, a revocable living trust can help you avoid estate taxes by allowing you to transfer your assets to your loved ones outside of probate, which can reduce the value of your estate. An irrevocable living trust can help you avoid income taxes by allowing you to transfer income-producing assets to the trust, which can reduce your taxable income.

A revocable living trust is a trust that can be changed or revoked by the grantor at any time during their lifetime. An irrevocable living trust, on the other hand, is a trust that cannot be changed or revoked by the grantor once it has been created. Revocable living trusts are often used for estate planning purposes, while irrevocable living trusts are often used for asset protection and tax planning purposes.