A trust is a relationship with respect to property and how I explain it to my clients is: I ask them to think about what it means to own your property. And I want you to think of it in two respects, the right to control your property and the right to enjoy your property.
And normally you do both, you don’t really think of it in those terms. But when you make a trust you’re essentially dividing those powers up: control and enjoyment. And the person who controls the property is the trustee and the people who enjoy the property are the beneficiaries.
And so in your lifetime generally hold both positions. They will be the trustee and they will be the beneficiary. And when something happens to them, either incapacity or death, a new trustee steps in and they can control the property. And because the trust has been set up, for example, at the bank, they know that you’re the trustee and they know that person X is the successor trustee. And so when something happens to you, person X will step in and be the trustee. And all of that can happen outside of court. And when something happens to you, you’ll have new beneficiaries that step up. Those will likely be your spouse or your kids. And so, that’s essentially what a trust is.