A trust-based estate plan is similar to a Last Will & Testament, but with a few key differences. It covers the four points listed under Last Will & Testament, but you’ll manage the assets, the person in charge of settling your final affairs will be called an Administrative or Successor Trustee verses an Executor and your beneficiaries may be subject to estate taxes.
A trust is a relationship whereby assets are held by one party and managed for the benefit of another. These assets may accumulate interests and are not a matter of public record; thereby maintaining privacy regarding the assets. Trusts have been around since the Roman era and have three parties associated with them: the trustor (the person putting assets into the trust), the trustee (the person managing the assets in the trust), and the beneficiary (the person benefiting from the assets in the trust). There may be multiple trustors, trustees, and/or beneficiaries. Your trust can be revocable (terminated or amended at any time) or irrevocable (terminated with beneficiaries’ permission only).