Types of Trusts Explained
Every common trust type — what it does, who needs it, and what it costs to set up.
Revocable Living Trust
The most common trust. You create it, fund it with assets, control it during your lifetime, and it distributes assets to beneficiaries at death — bypassing probate entirely.
Almost everyone who wants to avoid probate. Especially valuable in high-probate-cost states like California and New York.
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.
Irrevocable Trust
Once created, the grantor gives up control. The assets are removed from the taxable estate and protected from creditors. Used for tax planning and asset protection.
High-net-worth individuals wanting to reduce estate tax exposure or protect assets from creditors and Medicaid spend-down.
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.
Special Needs Trust
Holds assets for a disabled beneficiary without disqualifying them from government benefits like Medicaid or SSI. Can be funded by the beneficiary (first-party) or a third party.
Families with a disabled child, spouse, or other dependent who receives or may receive government benefits.
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.
Credit Shelter / Bypass Trust
Married couples use this to maximize use of both spouses' estate tax exemptions. At the first death, assets up to the exemption fund the bypass trust, sheltered from estate tax at the second death.
Married couples in states with low estate tax thresholds (Massachusetts, Oregon, Illinois, Washington).
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.
Charitable Remainder Trust (CRT)
You contribute appreciated assets to the trust, take an income stream for life, and receive a partial charitable deduction. The remaining assets go to charity at death.
Philanthropic individuals with highly appreciated assets (stocks, real estate) who want income and a tax deduction.
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.
Domestic Asset Protection Trust (DAPT)
An irrevocable trust that lets the grantor be a discretionary beneficiary while still protecting assets from future creditors. Only available in select states (Delaware, Nevada, South Dakota, Alaska).
Business owners, physicians, and professionals seeking creditor protection without moving assets offshore.
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.
Dynasty Trust
A long-term irrevocable trust designed to pass wealth across multiple generations while minimizing estate and generation-skipping taxes. Can last perpetually in some states.
Ultra-high-net-worth families wanting to preserve wealth for grandchildren and beyond while minimizing transfer taxes.
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.
Land / Real Estate Trust
Holds real estate in a trust to provide privacy (the owner's name doesn't appear in public records), simplify transfers, and avoid the need for ancillary probate in multiple states.
Real estate investors, landlords, and anyone who owns property in multiple states and wants to avoid probate in each state.
Cost varies by state, complexity, and whether you use an online service vs. a local attorney.