While trust funds, or trusts, may seem the province of the wealthy, there are actually many benefits to creating them, even if you're not a multimillionaire. Trusts can help you manage your property and assets, make sure they are distributed after your death according to your wishes, and save your family money, time and paperwork.
Simply put, a trust is legal document established by an individual or corporation known as a grantor. The trust holds property or assets for a specific person or group, called the beneficiary. Control of the trust is maintained by a trustee — in some cases the grantor is the trustee, and in others the grantor names a trusted family member, friend or professional [source: MetLife].
So how does a will differ from a trust? In a few ways. A will becomes active only after the person dies. It spells out the deceased person's wishes, such as who should be the guardian of their children or who should get their assets. A will always has to go through probate court and therefore is public knowledge. By contrast, a trust becomes active the day it is created and the assets might be distributed before the grantor has died [source: Jarrell].
There are many reasons to set up a trust, but not everyone should establish one — for some, a standard will is a better choice. Although do-it-yourself kits are available, the applicable laws are complicated, and anyone considering a trust should consult a lawyer. But before calling your attorney, read on to learn a bit more about the advantages of a trust.