Trust

A trust separates legal ownership from beneficial enjoyment: a trustee legally holds assets but must manage them solely for the benefit of the beneficiaries. Trusts are central to estate planning because they let you control how and when assets pass to people you care about, rather than handing everything over outright. A trust created in your Will is called a testamentary trust, while one set up during your lifetime is an inter vivos or living trust.

Trusts are used to protect vulnerable beneficiaries, manage tax, shield assets from creditors or relationship breakdowns, and delay control until a beneficiary is mature. Example: Priya's Will places her children's inheritance in a trust so the funds are managed by her brother until each child turns 25. The rules governing trusts come mainly from common law and each state's Trustee Act, so the trustee's specific powers can vary by jurisdiction.