Trust
A legal arrangement where one person (the trustee) holds and manages property for the benefit of another person (the beneficiary). Trusts can help avoid probate, reduce taxes, and protect assets.
Legal Definition
A fiduciary relationship in which a trustor conveys property to a trustee who holds legal title for the benefit of one or more beneficiaries, subject to the terms of the trust instrument.
Practical Example
David creates a trust and transfers his rental properties into it. His daughter is the beneficiary. A bank serves as trustee, collecting rent and managing the properties for his daughter's benefit.