All trusts are created by “Trustors” who are planning to secure their legacy, usually a married couple or an individual.
The Trustor selects an individual or corporation to manage and distribute trust property; this person is called the “Trustee”.
The Trustee must follow the Trustor’s instructions written in the trust while managing and distributing trust property to the “Beneficiaries” – the people who will benefit from the trust property.
Once the trust is created, the Trustor transfers their property into the trust and the trust takes care of the rest.
For most revocable trusts, the Trustor acts as Trustee and Beneficiary while they are alive – in that case, the person who created the trust can use their property just like they did before and not much changes during their lifetime.
However, when that person loses capacity or passes away, the trust names a successor Trustee to step in automatically and continue managing or distributing trust property to the trust beneficiaries. This is the primary value of a trust – without a trust, your loved ones may have to ask a court for guardianship over you or your legacy may have to go through the probate process.
Irrevocable trusts may have several goals that make this kind of structure unusable. Whether the goal of an irrevocable trust is privacy, tax planning, special needs planning, life insurance planning, or any other estate planning objective, you need to speak with an experienced estate planning lawyer before considering whether an irrevocable trust is right for your legacy.