The reasons people use trusts are many. A trust is a three-party arrangement involving a grantor, trustee and beneficiary. Trusts can consolidate assets, provide tax alternatives and deal with issues of incapacity among others. In essence, a trust establishes an agreement where a grantor transfers ownership of property to a trustee, who holds it for a beneficiary.

A trust is a legal arrangement concerning the ownership and disposition of property. The owner of the property (you, the grantor) transfers legal ownership to another person or company (the trustee). The trustee is responsible for using the property for the benefit of particular people or institutions (the beneficiaries) according to the written terms and conditions of the trust document. In some trusts, the grantor is also a beneficiary.

The property in a trust is legally owned by the trustee, not by you (the grantor). This transfer of legal ownership creates powerful tax opportunities. Also, the terms of the trust permit you to control the use and disposition of your assets, even beyond your lifetime.

Three major types of trusts exist: revocable, irrevocable and credit shelter.

• Revocable Living Trust
  A revocable trust allows for the professional management of your assets for you and your family during your lifetime and following your death. This type of trust keeps your assets out of probate, ensures that your beneficiaries are provided for in a timely manner and keeps the assets of your estate from becoming public record.



• Irrevocable Trust
  An irrevocable trust is created during life or after death and cannot be revoked or modified by the grantor. The grantor does not have any rights in the trust and a designated third party controls the property. An irrevocable life insurance trust is established during the life of the grantor and cannot be revoked or modified. It allows the grantor to name the trust as the owner and beneficiary of his or her life insurance policy and to name a trustee who will receive the benefits of the trust upon the grantor's death.



• Credit Shelter Trust
  A credit shelter trust provides estate tax advantages for couples with large estates. It takes full advantage of the estate tax exemption and can be structured to provide income to the surviving spouse, if desired.