Trust
A legal arrangement where one person holds and manages property or assets for the benefit of another person.
A trust is a legal arrangement where one person (the “grantor” or “settlor”) transfers assets to another person or institution (the “trustee”) to manage for the benefit of a third person (the “beneficiary”). The trust document lays out the rules for how the assets should be managed and distributed.
There are many types of trusts. A revocable living trust lets you manage assets during your lifetime and pass them to beneficiaries after death without going through probate. An irrevocable trust, once created, generally cannot be changed and may offer tax benefits. Special needs trusts can protect benefits for people with disabilities. Minnesota’s Trust Code, based on the Uniform Trust Code, governs how trusts are created and managed.
Why it matters: Trusts can help families avoid probate, reduce estate taxes, protect assets, and provide for loved ones who may not be able to manage money themselves. They offer more flexibility and privacy than a will alone.
Example: A parent creates a revocable living trust and transfers their home and investment accounts into it. The trust names their children as beneficiaries. When the parent passes away, the trustee distributes the assets to the children without going through probate court.
Estate planning, inheritance, managing assets for minors or people with disabilities