Legally, a trust can be defined as a legal instrument that creates an entity, whose identity is legally separate from that of the creator. Usually a party who creates a trust, the Trustor, transfers title to some or all of his/her property, in trust, to another person, the Trustee, to be held for the benefit of either the Trustor or one or more third parties, known as beneficiaries. This transfer creates a situation in which title is held in more than one manner - legal title is held by the Trustee, and equitable title is held by the Trustor or beneficiary(ies).

Generally stated, a trust is an agreement between the Trustor and Trustee, where the Trustee agrees to administer and distribute the property, along with the income from the property, as specified in the trust agreement. Commonly, beneficiaries are specified in a trust agreement and the agreement usually specifies who should receive what assets or proceeds from the trust on the death of the Trustor, or sometime thereafter.

Sometimes, the trust will enable the beneficiaries to receive Trust income during the life of the Trustor, and sometimes no property is transferred to the beneficiaries until the Trustor dies. Often, the Trustee is instructed in the Trust Agreement to withhold any distribution of trust income or property until each of the beneficiaries reaches a certain age. There are as many differences in trusts as there are trusts, but this overview will help you to visualize the process.