A Trust is a legal structure that owns whatever property is placed in the Trust. The trustee, who is appointed in the Trust, manages the Trust. A Trust may be included in a Will (Testamentary) and is used for tax planning, protection from creditors, poor management or divorce, control over how the assets are used or spent, to provide for the surviving spouse in a second marriage and also provide for the children of the first or both marriages, or to allow a disabled beneficiary to remain on public benefits. A Trust may also be used while the individual is alive (Inter vivos). This type of trust is used to avoid probate, making gifts and to keep your life insurance proceeds from counting as part of your assets for federal or state estate tax purposes.
Charitable Trusts can become effective during life or at death. The charitable remainder trust is similar to other types of trusts except that it has a charitable beneficiary. A donor transfers property under a Trust agreement that specifies how the income and principal are to be distributed. The donor or any individual of their choosing receives income for their life or for a term of years and upon death or the expiration of the term, the principal belongs to the charity. There is fulfillment of philanthropic goals as well as tax savings involved in the use of Charitable Trusts.