A trust, similar to a will, is a way to designate what happens to a person’s belongings after they pass away.
When setting up a trust (also known as a trust fund), the grantor creates and transfers assets, such as money or property, to it. They decide what happens with the assets and when. For example, the grantor can designate that the money or items be dispersed to the beneficiaries (the people or entities, such as a school or charity, that receive the assets in a trust) at a certain time or for certain uses. The trust is managed by a trustee who is in charge of ensuring that the terms of the trust are met. There are two main types of trust funds: revocable and irrevocable.
A revocable trust (also called a revocable living trust) has more flexibility than an irrevocable trust. It’s set up and operated while the grantor is still living and they are usually designated as the trustee. This means that they can make decisions to modify the terms of the trust how they see fit as well as transfer things in and out of it.