Trusts are flexible vehicles to allow a Trustor to direct disposition of his estate after his death. They often can be implemented without a formal probate, saving the cost of the probate. Trusts can leave the estate in the hands of a trustee to distribute either upon the testator’s death, or over a period of time. For instance, if he drafts the trust when he has grown children, he might want to provide for a spouse, and then equally to his children. If the children are young, disabled, or irresponsible, he might want it distribute it throughout their lives, or not until their 35th and 40th birthdays.
By far the most popular trusts are revocable living trusts drafted for the purpose of using the lifetime estate tax credit of both spouses. Using this Trust, with assets over the amount of the credit, the couple can end up transferring tens, or even hundreds of thousands of dollars more to their children than without the Trust. Trusts are only effective if they are properly funded and should not be funded with certain assets.