There are 4 main types of trusts Living, Testamentary, revocable, and irrevocable. those are the 4 main types although there are more subcategories with a variety of uses. Some subcategories of the main trusts are Charitable Trusts, Spendthrift Trust, or Special Needs Trust. Though there are many types of trusts this will only be on the 4 main types I previously mentioned.
A living trust is a legal arrangement established by an individual (the grantor) during their lifetime to protect their assets and direct their distribution after the grantor’s death. So the main purpose of the trust is to oversee the transfer of your assets after your death. It is fairly similar to how people think a will works. The main difference between a living trust and a will is that a living trust cannot do as much and it is put in place before death.
A Testamentary Trust is very similar to a living trust. the difference between the 2 is that a living trust is created by the grantor during his or her lifetime, while a testamentary trust is a trust created by the grantor’s will. The major advantage of a testamentary trust is that the grantor retains control over his or her assets. Because a testamentary trust becomes effective only upon the grantor’s death, the grantor may make changes to its terms any time before death.A disadvantage of a testamentary trust is that it does not avoid probate—the legal process of distributing assets through the court.