What is a Trust? Do I need a Trust? What type of Trust do I need?
A "Trust" (or more specifically a Trust Agreement) is a contract that allows someone you name to hold your assets for your benefit and/or the benefit of those you love. Trusts are "non-probate" assets (see below). The person that you name as "trustee" is a fiduciary, which means that they have a legal duty to you and to your beneficiaries to act in good faith, and to do the things they are appointed to do under the terms of the Trust Agreement. Like a Will, a Trust allows you to create a specific, unique, plan to provide for your family during your lifetime and after you die.
There are different types of Trusts. A "testamentary trust" is a Trust that is created in your Will. No assets are owned by the Trust until after you die. Those assets are then held and eventually distributed under the terms and conditions written in the Trust Agreement. A "living" or "intervivos" trust is a Trust that you set up while you are still alive. With this type of Trust, you will typically transfer all of your assets to the ownership of the Trust at the time it is first set up. Often with a Living Trust, you and/or your spouse will be the initial Trustees so that you retain some control over how your resources are used while you're still alive. There is then a secondary plan in the Trust Agreement that would direct how those resources are managed after you and/or your spouse have died.
A "revocable trust" is a Trust Agreement that you can change during your lifetime. With this type of Trust, you can even "revoke" or get rid of it completely. In contrast, an "irrevocable trust" is one that cannot be changed. Once you place assets into an irrevocable trust, they have to stay there, and they can only be used, managed, sold, or distribute under the specific terms in the Trust Agreement.
These are just a few of the main types of Trusts, but there are many others, including special needs trusts, credit shelter trusts, and asset protection trusts. You should always talk with a lawyer BEFORE you create or put any assets into a trust, so that they can help you to know which type of Trust will be best for you and your needs.