A Trust is just an agreement between a trust creator and the person who has legal control of the trust (called a trustee). This is often the same person initially but a successor trustee is usually designated for when the original trustee passes away. A common example would be a married couple that set up a trust (trust creators) and control it initially (trustees) but then designate their oldest child to take control of the trust when they pass away (successor trustee).
Upon creation of the trust, the trust creator (also called a Grantor, Trustor, or Settlor) transfers property to the trust by changing title to the property into the legal name of the trust agreement. So, for example, a homeowner would change the ownership of their home from their individual name to the name of the trust.
A trust agreement includes instructions to the Trustee regarding the management and control of everything included within the trust property. The Trustee then follows the trust instructions and manages the trust property for the benefit of those that will one day receive the trust property, called Beneficiaries (covered in another Legalese 101).
The most common type of trust is a living trust, which simply means a trust agreement whereby the Grantor and Trustee are the same person and the Beneficiaries don’t receive the trust property until the Grantor/Trustee passes away.
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