Definition: Trust

A trust is a legal device that is used to hold and manage property for the benefit of one or more beneficiaries. Property is transferred by its owner, known as the “settlor,” “trustor,” or “grantor” for the intent of creating a trust. The trust is managed by a fiduciary, known as a “trustee.” Generally, the trustee has broad powers and discretion to manage the assets in the trust, but is bound to comply with the rules and restrictions placed on the trust and its assets at the time the trust is created.

Trusts are very flexible legal instruments and can be customized in a variety of ways to meet different needs that cannot be met with a simple will. Common reasons for trust creation are to avoid probate, to minimize the tax liability of one’s estate, in particular estate tax liability, or to provide for a child with special needs after the death of his or her parents.

The cost of creating and (especially) of maintaining a trust can be very high when compared to the relatively low cost of preparing a basic estate plan and going through Washington’s probate processes. For this reason, we do not recommend trusts be included in wills or used as a will alternative for most people.

If you would like to prepare a trust, you should consult with an estate planning attorney who is licensed to practice law where you live.