Before diving into the types of trusts, it’s important to understand two key terms that appear throughout estate planning: grantor and probate.

A grantor (also known as a trustor or settlor) is the person who creates a trust. The grantor transfers assets into the trust and establishes the rules for how those assets will be managed and distributed.

Probate is the court-supervised legal process for distributing a person’s estate after death. It can be time-consuming, costly, and public. Many people use trusts to avoid probate and ensure a smoother transfer of assets to beneficiaries.

With those concepts in mind, let’s look at the most common types of trusts used in the United States.

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1. Revocable Living Trust

A revocable living trust allows the grantor to maintain control of trust assets during their lifetime. The trust can be amended or revoked at any time. After the grantor's death, the assets pass directly to beneficiaries without going through probate.
Use case: Avoiding probate while maintaining flexibility and control.

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2. Irrevocable Trust

Unlike a revocable trust, this type cannot be altered or revoked without the consent of the beneficiaries. Because the grantor relinquishes control, the assets are no longer considered part of their taxable estate.
Use case: Asset protection and estate tax reduction.

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3. Testamentary Trust

Created through a will, a testamentary trust only takes effect upon the grantor’s death and is subject to probate. It provides detailed instructions for how assets should be managed and distributed.
Use case: Controlling distributions to minor children or beneficiaries who need financial oversight.

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4. Charitable Remainder Trust (CRT)

This trust provides income to the grantor (or another person) for a set number of years or for life, after which the remaining assets go to a designated charity.
Use case: Generating income while benefiting a charitable cause and reducing estate taxes.

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5. Charitable Lead Trust (CLT)

The opposite of a CRT: a charity receives income for a term, and the remaining assets pass to non-charitable beneficiaries, often family members.
Use case: Supporting a charitable cause while transferring wealth to heirs in a tax-efficient way.

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6. Special Needs Trust

This trust allows a person with a disability to receive financial support from the trust without losing eligibility for government assistance programs like Medicaid or Supplemental Security Income (SSI).
Use case: Providing for a loved one with special needs while preserving public benefits.

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7. Asset Protection Trust

Designed to protect assets from creditors and legal claims, this type of trust is usually irrevocable and governed by specific state or offshore jurisdiction rules.
Use case: Shielding wealth from lawsuits, divorce, or creditor claims.

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8. Spendthrift Trust

This trust restricts a beneficiary’s ability to access the trust principal and protects the assets from the beneficiary’s creditors.
Use case: Preventing poor financial decisions or creditor claims against inherited funds.

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9. Grantor Retained Annuity Trust (GRAT)

The grantor places appreciating assets in the trust and receives fixed annual payments (annuities). After the term ends, any remaining value passes to beneficiaries with minimal or no gift tax.
Use case: Transferring appreciating assets to heirs while reducing gift and estate tax exposure.

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10. Qualified Personal Residence Trust (QPRT)

This trust allows the grantor to transfer a primary or secondary residence out of their taxable estate while retaining the right to live in it for a set number of years.
Use case: Reducing estate tax liability while maintaining use of the home.

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11. Medicaid Asset Protection Trust (MAPT)

This irrevocable trust helps individuals qualify for Medicaid by transferring ownership of assets in advance of needing long-term care. Assets in a MAPT are protected after the applicable “look-back” period.
Use case: Preserving assets for heirs while planning for future long-term care needs.

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13. Pet Trust

This trust provides funds and instructions for the care of a pet if the owner dies or becomes incapacitated.
Use case: Ensuring a pet is cared for according to the owner’s wishes.

Trusts are not one-size-fits-all. The right structure depends on your goals, whether that’s avoiding probate, protecting assets, planning for a loved one with special needs, or minimizing taxes.
To learn more about which trust might suit your needs, contact our office to schedule a consultation with an experienced estate planning attorney.