What's a Trust?
A trust is like an invisible box that can hold assets (things you own, such as real estate, investments, bank accounts, furniture). A written legal document creates a trust and can include the rules you want. You can change and revoke a revocable trust.
When you transfer ownership of your assets to the trust, you can be the first trustee (the one who manages assets of the trust). If you are trustee of your revocable trust, you continue to use your social security number and report income on your personal tax return.
Your trust lists who you want to be successor trustee(s) if you are not able to manage assets due to death, incapacity, or resignation. This provides a smooth transition and avoids a guardianship proceeding in court where a judge would determine who will make decisions for you.
A person who receives benefit of the trust assets is called a beneficiary. Trust assets can be used for you and those you describe in the trust (for example, your spouse, descendants, loved ones, friends, charities). Assets held in trust can protect your beneficiaries from creditors, including credit card companies or a judgment after a serious car accident. If your child or grandchild divorces, assets in your trust are not marital property for the divorcing spouse to claim. Assets held in trust avoid the court administrative process of probate.
A trust can help save money and time.