A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a Settlor, who transfers property to a Trustee. The Trustee holds that property for the trust’s beneficiaries. Trusts are broadly divided into two categories – testamentary and living trusts. A living trust (formally referred to as an inter vivos trust) takes effect immediately after creation unlike a testamentary trust which does not take effect until the death of the Settlor. Living trusts are very common additions to the average estate plan because of the variety of estate planning goals that can be met using a living trust. Learn more about living trusts.