A trust is a legal entity whereby one person or a corporation (like a bank) holds title to assets for the benefit of someone else. In some cases, the same person can be the trustee and the beneficiary. A trust you create and fund while you are alive is called an inter vivos trust, or a living trust. A trust which is set up in your will to become effective at your death is called a testamentary trust. Trusts are often used in estate planning. You can protect assets for your children through the use of a trust. The living trust can be used as a way to distribute assets at your death without probate. However, all assets you place in a living trust of which you are a beneficiary are part of your estate for tax purposes (i.e., they are included as part of your estate when determining if your estate must pay estate taxes).