A trust is a legal arrangement that allows you to direct your assets after you die. They are increasingly being used by people from a variety of economic backgrounds and can provide important estate planning benefits that go beyond traditional wills.

Unlike wills, trusts don’t require probate and are not public records. This can help you keep your privacy while preserving your assets, and it also avoids unnecessary fees associated with probate.

Trusts can be used for a wide range of purposes and can help you maximize your tax benefits. They can also protect your assets from creditors, protect a loved one with special needs, or ensure that your children are provided for after you pass away.

The best way to decide whether a trust is right for you is to talk with an attorney. They will listen to your concerns, explain the options available and give you a sense of their experience with trusts. They can then guide you through the process of creating a trust and choosing the type that’s right for you.

A trust is created when a person transfers property to another person (the trustee) for the benefit of another (the beneficiary). The beneficiary receives income and principal distributions from the trust. This is usually done through a trust agreement, which the trustee must follow.

You can transfer almost any asset to a trust, including financial assets and real estate. You can also change the terms of the trust at any time and name a successor trustee to take over in case you are no longer able to serve as trustee.

When you’re thinking about what assets to include in a trust, consider your most prized possessions, such as art, coins and stamps. These items have taken years to collect and can be very valuable. It can be tempting to leave them all to your spouse, but it’s better to plan ahead and direct how they are to be transferred to specific individuals or a museum or other nonprofit organization.

Once the trust is established, you will need to make sure that all your assets are titled in the name of the trust. This can be difficult if you’ve already moved your property to a different location, so it’s best to work with a notary or a lawyer who specializes in trusts to establish your trust properly.

If you are the trustee, you may be required to file an income tax return for the year that you administer your trust. This is called a T3 return. It’s a good idea to discuss with your accountant how the income generated by your trust will be taxable for you.

Typically, trusts are taxed at the highest marginal rate. If you have a large amount of wealth, it may be more advantageous to use a lower marginal rate, but you should always consult with your tax professional to determine what is best for your situation.