A trust is an estate planning tool that enables you to control how your assets are distributed and used after your death. It is common for people to use a will as part of their plan, but there are other ways that a trust can be beneficial.

A person who creates a trust is called the “grantor” or “settlor.” The grantor transfers money and property into the trust, which is overseen by a trustee. The trustee follows the instructions in the trust document to manage and give out the assets for the benefit of one or more beneficiaries. Beneficiaries may be current (who receive income and/or limited access to principal) or future (remainder beneficiaries). A trustee can be a family member or other trusted individual or institution such as a bank or investment firm.

The assets in a revocable trust avoid the time-consuming court process of probate, so they are not taxable when you die. In addition, the trust can be kept private. This can be important if you want to keep details about your estate private, for example, if you have a beneficiary with a gambling problem or other irresponsible spending habits.

Another advantage of trusts is that they can reduce or even eliminate inheritance taxes. When a person inherits money from their parents, for example, it is typically taxed at a steep rate. Trusts can provide a way to pass on wealth to heirs without the burden of excessive taxes and expenses.

There are many reasons why you may choose to include a trust in your plan, whether it is to help protect yourself or your heirs from creditors or to take advantage of special needs provisions for loved ones with disabilities. You should discuss your specific concerns with an attorney who specializes in estate planning and is familiar with trusts. Your attorney can help you understand the benefits of a trust and draft a document that meets your goals. He or she will likely work closely with your financial and tax advisors to make sure all aspects of your situation are considered and that your plan is comprehensive.

It’s also essential to work with a trustworthy trustee. Your trustee must be someone that you can rely on to carry out your wishes and protect your heirs. A professional corporate trustee can provide unbiased management and bring experience to the process, helping to preserve family relationships and ensure that your wishes are carried out as you intend. It’s also important to talk about your intentions with your trustee so he or she knows what you want the trust to accomplish. This can help avoid confusion and conflict in the future. A competent trustee can also help you set up a trust that allows for periodic distributions of trust income (interest, dividends, rents, royalties, etc.) that can be used for a variety of purposes (buy a home, start a business, fund an education). You can select the amount(s) you wish to use or you can allow your trustee complete discretion.