A trust is a legal creation that allows a trustee to hold and direct the assets that are transferred into it on behalf of a beneficiary. More specifically, a trust is a financial arrangement between three parties: The first party, the Grantor (the one who makes the trust), grants another party, the Trustee, the power to hold assets and distribute them to a third party, the beneficiary, at a designated time.
There are literally hundreds of types of trusts, each with different names and acronyms. But, in short, trusts work in tandem with (not as alternatives to) wills to direct how and when beneficiaries receive your assets. Trusts greatly expand your estate planning options, whether your primary concern is tax mitigation, asset protection, or wealth transfer.