Trusts can be organized to achieve a variety of different objectives. For example, you can use a trust to transfer property, help minimize estate taxes, preserve the assets of minors until they are adults, or benefit a charity. Trusts are frequently used in estate planning. Living trusts created during the life of the grantor facilitate the transfer of assets to heirs without the cost or publicity of probate.
Trust transfers are usually faster and more efficient than will transfers. These trust transfers allow grantors to maintain privacy regarding the nature and value of their assets. They can be used to maintain the confidentiality of different values of assets transferred to different heirs. Ensuring the privacy of family businesses and real estate held through entities not publicly identified with their owners are additional reasons for using trusts.
Some trusts help reduce estate taxes. A living trust (also called an inter vivos trust) is simply a trust that is created while you are alive. Beneficiaries you name in your living trust receive trust ownership when you die. Instead, you could use a will, but wills must go through the court process that oversees the transfer of your property to your beneficiaries.