Unlike the Will that must be approved by the probate court, the trust can pass assets to the next generation without court involvement. Trusts also are used for minimizing taxes as well as maintaining privacy of one's financial affairs. The Will becomes publicly available at death.

There are three parties to a trust: the Grantor who provides the trust assets, the Trustee who manages them, and the Beneficiaries to whom the Trustee ultimately distributes the trust assets. A trust is an agreement between the Grantor and the Trustee in which the trustee agrees to carry out the wishes of the Grantor for the benefit of the Beneficiaries. The legal title to the assets is transferred by the Grantor to the Trustee, who may sometimes charge a fee for the service performed.

There are various types of trusts. A Testamentary Trust is one that is created by the Will. These trusts are not very popular since the Will is probated and the trust formed under it requires constant supervision of the probate court. The alternative is an Intervivos Trust, also called a Living Trust, which is created during the Grantor's lifetime. A Living Trust may be Revocable, which means that the Grantor may revoke it at any time, or Irrevocable, which means that the Grantor is left without any power to revoke it. A Charitable Trust is one that is created for a charitable purpose, such as relief of poverty; advancement of education, science, art, religion, or health; or governmental purposes, including parks and museums. Life Insurance Trusts are those in which life insurance proceeds or policy are the trust asset.

The Revocable Living Trust has become the prime vehicle of choice in modern estate planning. The assets transferred into the trust during the Grantor's lifetime completely bypass the probate court at death. This trust also helps minimize estate taxes at death. The Living Trust is accompanied by a special kind of Will, called the Pour Over Will, which collects any remaining assets of the Grantor and also places them into the trust. Irrevocable trusts, on the other hand, are typically used for such purposes as asset protection from creditors, or reduction of the decedent's taxable estate. Irrevocable Life Insurance Trusts keep the insurance proceeds from being counted as part of the decedent's estate, and minimize the tax burden.

An important question is who may serve as Trustee. In many cases, the Grantor, the Grantor's spouse, or Children may serve as Trustee. There are tax implications to be considered. Alternatively, financial institutions, such as banks, or lawyers and accountants may serve as Trustees. More than one trustee may be appointed. But this usually poses a problem since they all must unanimously agree to everything. It is possible, however, to separate the responsibilities of each trustee.

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