A trust is a fiduciary relationship in which a trustor entrusts property or assets to another party, known as the trustee, for the benefit of a third party. Trusts are created to offer legal protection for the assets of the trustor, to ensure that those assets are transferred according to the trustor's desires, and to save time, reduce paperwork, and, in some situations, to avoid or decrease inheritance or estate taxes. A trust can also be a type of closed-end fund formed as a public limited company in finance.

Settlors establish trusts by deciding how to transfer some or all of their assets to trustees. The assets of the trust are held by these trustees for the beneficiaries. A trust’s regulations are determined by the terms under which it was established. It is possible for older beneficiaries to become trustees in some places. In some countries, for example, the grantor can be both a lifetime beneficiary and a trustee.
A trust can be used to decide how a person’s money should be managed and distributed while they are living or after they pass away. A trust can help you avoid probate and taxes. It can protect assets from creditors and give beneficiaries instructions on how to receive an inheritance. Trusts have the disadvantage of taking time and money to establish and cannot be simply cancelled.

Because trust is a legal entity that holds property, the assets are often safer than if they were held by a family member. Even the most well-intentioned relative could face a lawsuit, divorce, or other calamity, placing those assets at risk.
Though they appear to be aimed largely toward high-net-worth individuals and families, because they can be costly to set up and manage, they may be valuable to those of more middle-class means – for example, in ensuring care for a physically or mentally impaired dependent.
Some people utilise trusts just to protect their privacy. In some jurisdictions, the terms of a will may be made public. The same criteria that apply to a will may also apply to a trust, and people who don't want their wills made public use trusts instead.
Estate planning can also be done via trusts. The assets of a deceased person are usually left to the spouse, and then divides them equally among the remaining children. Trustees is required for children under the age of eighteen. The assets are only under the trustees' control until the children attain adulthood.
A step-up in basis is applied to trust assets, which can result in significant tax savings for the trust's beneficiaries. On the other hand, assets given out within the owner's lifetime, usually retain their original cost basis.