We are often asked the question, what is a trust and do I need one? While there several reasons to setup trusts the most prevalent is to avoid probate and make transferring property to beneficiaries easier and faster.
A simplified answer to what is a trust, is it is can be compared to a safe deposit box that holds valuable items. Individuals assign property rights over to the trust. Since property is no longer owned by the person it becomes exempt from probate.
One of the biggest misconceptions about trust funds is they are reserved for wealthy individuals. While there are certain kinds of trusts, such as irrevocable life insurance trusts (ILIT) which is used to offset estate and inheritance taxes, the bulk of trusts are available to people with ordinary means.