TRUSTS: A Complex Vehicle which MAY Help Avoid Inheritance Tax    
A trust is a document and a legal process in which one gives to another person legal right to hold money or property as a manager or custodian for the benefit of some party, which in some cases is the person who creates the trust. The person who creates the trust is sometimes called a settlor or grantor, donor or creator. The concept of the trust is to place the ownership of property in the hands of a particular person subject to revocation or in some cases irrevocably. The concept of the trust is to remove in some cases the control and title of property from one person to another person either temporarily or permanently. The trustee always holds said property for the benefit of a beneficiary.
The distinction between revocable trusts is an important one because in order that a person making the trust not be charged with owning the trust as principal of themselves, creation of the trust must meet a certain standard and unless that standard is met a grantor may be deemed to have his interest merge with the trustee. The trustee may have his interest merged with the beneficiary depending upon the rights and duties of the parties.
The trustee functions in the fiduciary capacity, which means that the duty of trust on the responsibility rests upon the person subject to critique by others to include government and various agencies of the government, as well as the beneficiaries and relatives of the grantor.
Questions of fraud, overreaching, undue influence, duress and other similar principals apply which can defeat the entire concept of the trust and the trust itself should a person withstanding i.e., the ability to attack the trust, appear and in effect challenge the trust. The trust can be created by what has been termed as deed of trust or which means it can be created in a separate instrument or it can be created by Will where certain assets of the will pour over into a trust. The trust created during the life time of the grantor is sometimes called an intervivos trust meaning created during the life of the grantor whereas a trust created from a will would be referred to as a testamentary trust. A special kind of trust is a spend thrift trust which seeks to preclude creditors of a beneficiary from reaching the assets of the trust.


The Truth about Probate and Living Trusts in Pennsylvania