Definition
A legal arrangement where a trustee holds and manages assets for named beneficiaries under written rules. A revocable living trust, the most common kind, lets you control everything while alive and passes assets at death without probate.
Why it matters
A trust adds what a will cannot: probate avoidance, privacy, and control over timing, such as staging an inheritance instead of handing a lump sum to an 18-year-old. It only works for assets actually retitled into it.
Example
Parents place their $400,000 home and investment accounts in a revocable living trust naming their children as beneficiaries at ages 25 and 30. At the second death, the successor trustee distributes on that schedule, no court involved; the vacation account they forgot to retitle goes through probate anyway.
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.