Control and protect your assets with a trust. Used well, a trust lets you decide who gets what, when, and how, both while you are alive and after you are gone.

What is a trust?

A trust is a legal arrangement built around three roles. The person who creates it and puts in the assets is the grantor. The grantor transfers legal title of an asset into the trust for the benefit of one or more beneficiaries, and the trust is managed by one or more trustees. A trust can be created while you are living, or written into your will to take effect at your death.

Revocable vs. irrevocable

Trusts come in two basic types, and the difference drives the taxes. A revocable trust can be changed or cancelled at any time, so the IRS still counts its assets as part of your taxable estate, and you still pay income tax on what it earns. An irrevocable trust cannot be changed once it is executed; the assets are permanently moved out of your estate and into the trust, which pays its own income and capital gains taxes, and those assets are generally not subject to estate tax at your death. Most revocable trusts automatically become irrevocable when the grantor dies or becomes incapacitated.

The role of the trustee

The grantor names a trustee to manage the trust's investments and assets. You can stay involved in the major decisions, or give the trustee full authority to act on your behalf. A trustee can be an individual you trust, or a professional or corporate trustee. Either way, a trustee has a fiduciary responsibility, a legal duty to act in the best interest of the trust and its beneficiaries. When a professional or corporate trustee is the right fit, we can help you get there (see the coordination section below).

What a trust can do

Although trusts can be arranged in many ways, they are most often used to:

• Keep control of your assets and provide security for you and your beneficiaries
• Provide for beneficiaries who are minors or who need help managing money
• Help reduce estate or income taxes
• Provide professional management of your estate
• Avoid the cost and delay of probate
• Keep your affairs private
• Protect real estate or a business

Most people use a trust to stay in control of their assets while they are alive and well, and to keep that control in trusted hands if they become unable to act for themselves or pass away.

The living trust

If your goals are privacy, centralized control, and avoiding probate, a living trust is a common starting point. You can serve as both the trustee and the beneficiary while you are alive, keeping full control and receiving all the income. If you become incapacitated, your co-trustee or successor steps in to manage things. At your death, your successor trustee distributes what remains according to your instructions, without the delay and public record of probate.

Trusts must be drafted by a qualified attorney. This section is for informational purposes only and is not legal advice. Please seek the advice and services of an attorney regarding the creation of a trust and your personal situation.

Good news first: most families will not owe federal estate tax. In 2026, each person can pass roughly $15 million during life or at death before the federal estate and gift tax applies, and a married couple can combine their exemptions. Above that threshold, the federal rate reaches about 40%.

A few things still deserve attention even under that generous limit. Several states levy their own estate or inheritance tax at much lower thresholds, so where you live matters. And assets you leave at death generally receive a step-up in cost basis, which can erase built-up capital gains for your heirs. That is an important reason not to simply give everything away during your lifetime.

Where an estate is large enough to face a tax, irrevocable trusts do the heavy lifting by moving assets out of your taxable estate. One common tool is the Irrevocable Life Insurance Trust (ILIT): you make gifts to the trust, the trust uses them to buy a life insurance policy on you, and at your death the death benefit pays into the trust and gives your heirs tax-free cash to cover any estate tax bill, without having to sell the family business or property to raise it.

Estate, gift, and generation-skipping tax figures are set by federal law and are subject to change; the amounts shown are for 2026 and are illustrative. Several states impose their own estate or inheritance taxes. This is educational information, not tax or legal advice. Please consult a qualified tax or legal professional about your situation.

Passing wealth to grandchildren, or further down the line, comes with its own rules. The generation-skipping transfer (GST) tax is designed to tax wealth that skips a generation, but each person has a GST exemption (about $15 million in 2026, the same as the estate exemption) that can pass assets to grandchildren free of that extra layer of tax. A Generation-Skipping Trust is built to make the most of that exemption.

Planning across generations is not only about taxes, though. It is about timing and readiness: whether to give during your lifetime or at death, how to protect an inheritance from a young heir's inexperience (or a future divorce or creditor), and how to pass along your values right along with your assets. A well-drafted trust can release money gradually, tie it to milestones, or keep it protected, so a legacy helps the next generation rather than harms it.

If retirement accounts are part of what you will leave, remember the inherited-IRA rules changed: most non-spouse heirs must empty an inherited IRA within 10 years. We cover that in more detail on our Retirement Planning page.

Generation-skipping and estate tax figures are set by federal law and are subject to change; the amount shown is for 2026 and is illustrative. This is educational information, not tax or legal advice. Please consult a qualified professional about your situation.