What is a Trust?

A trust is a legal contract whereby a designated person or entity (the “trustee”) is appointed to manage assets for the benefit of others, known as beneficiaries.

In the process of establishing a trust, the grantor, or the individual creating the trust, drafts a document that outlines crucial details. This includes specifying the beneficiaries, the manner and timing of asset distribution, and the appointment of a trustee, who often is—but need not be—the individual establishing the trust. Following the creation of this legal entity by way of this document, assets are transferred into the trust, assigning the trustee with their management.

A key characteristic of trusts is the transfer of legal ownership of assets. Upon their transfer into the trust, these assets no longer remain the personal property of the grantor (the person creating the trust). The trust, recognized as a separate legal entity, holds these assets. This shift has significant implications, particularly in relation to the probate process.