A trust is a legal arrangement where a person (the grantor) transfers assets to a trustee to hold and manage on behalf of a beneficiary. This structure allows for the controlled distribution of assets, often to avoid probate, reduce estate taxes, and provide legal protection. The grantor, trustee, and beneficiary are the three main parties involved in a trust.  
Key parties
Beneficiary: The person or organization who will receive the benefit of the trust's assets. 
Grantor (or Settlor): The person who creates the trust and transfers assets into it. 
Trustee: A person or entity (like a bank) who holds legal title to and manages the trust's assets according to the grantor's instructions. 
How it works
Legal structure: 
A trust is a legal entity that holds assets, such as money, real estate, or investments, separate from the grantor's personal ownership. 
Asset management: 
The trustee manages the assets according to the terms set out in the trust document. 
Distribution: 
The grantor specifies how and when the assets should be distributed to the beneficiaries. 
Bypassing probate: 
Trusts can avoid the lengthy and public court process of probate that is required for assets passed through a will. 
Tax benefits: 
Depending on the type of trust, it can offer potential benefits like reducing estate taxes.