# What is a Trust?

**URL:** <https://howtodiscuss.com/t/what-is-a-trust/227>\
**Category:** Q&A\
**Created:** [May 7, 2020, 9:35am UTC](https://howtodiscuss.com/t/what-is-a-trust/227 "2020-05-07T09:35:33Z")\
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**Author:** ![Mr.Umar](https://howtodiscuss.com/user_avatar/howtodiscuss.com/mr.umar/32/3394_2.png) [@Mr.Umar](https://howtodiscuss.com/u/Mr.Umar)\
**Post date:** [September 7, 2020, 11:55am UTC](https://howtodiscuss.com/t/what-is-a-trust/227/2 "2020-09-07T11:55:00Z")

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A trust is a fiduciary alliance trustor and trustee. The trustor gives the trustee the right to hold title to assets to benefit for a third party. Trust is a highly versatile relationship which can be used for different purposes to achieve goals or ambition.

 ![trust](https://howtodiscuss.com/uploads/default/original/2X/a/a092576c60bc7845509130cf12819485c884f1b9.jpeg)

## USES of trust:

Trust can also be used for **estate planning**. The property of a dead individual is passed to the spouse and then distributed to the surviving heirs. And only the trustees have access and hold on assets until the children are grown up.

Trust can also be used for **tax-planning**. In some cases, the tax provided by using a trust is tiniest as compared to other alternatives. As such, the usage of trust has become a staple in tax planning. And mostly used by corporations, now even individuals used it.

## Types of Trust Funds:

1. **Credit-shelter trust:**  
Aka bypass or family trust, it allows a person to transfer the amount equals to estate-tax relief.

2. **Generation-Skipping Trust:**  
Generation skipping trust allowed a person to transfer its assets to at least two generations, tax-free.

3. **Qualified Personal Residence Trust:**  
It will take away a person’s house from the estate.

4. **Insurance Trust:**  
A life insurance policy in a trust that was removing it from a taxable estate required no need to pay the estate coast.

5. **Qualified Terminable Interest Property Trust:**  
This trust allows a person to direct assets transfer to the children or others at difficult times like a spouse dies.

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