Trust is a legal arrangement by which one person holds legal title to property for another person. The person-who can be an institution such as a bank or law firm--holding the title to property is the "trustee." The person for whom the trust is held is the "beneficiary." The trustee's instructions are set out in the trust document.
There can be certain advantages to establishing a trust. The best-known is avoiding probate. If a trust ends when the donor dies, any property passes immediately to the beneficiary without going through probate.
There are several different types of trusts:
Revocable Trusts: A revocable trust gives the maker control over the trusts. He/she can change the beneficiary(ies), the trustee, and any other feature of the trust with a minimum of time and effort.
Irrevocable Trusts: An irrevocable trust cannot be changed or amended except pursuant to a court order-which is difficult to obtain.
Testamentary Trusts: A testamentary trust is created within a will. It does not take effect until the death of the grantor.
Miller Trusts: A Miller Trust is one with its assets consisting of income. It is commonly known as an income-sheltering device and is used to enable the grantor to qualify for Medicaid. The Miller Trust has been codified at 42 U.S.C. 1396 and is referred to as a qualified income trust ("QIT").