In the past, an irrevocable trust may have had one trustee or two co-trustees to oversee its execution. Today, there may be many people serving in key roles to ensure that the trust is properly executed. One important role is that of the general trustee who keeps records and who files tax returns for the trust. In some states, it may be possible for one person to create a trust, be a beneficiary of the trust and hold assets outside of the trust.
At the same time, this person may be unreachable by creditors depending on where the trust was created. Additionally, a trust may have an investment trustee who is allowed to manage both the trust and interests in private ventures such as a family business. A trust protector is usually a group of people who may be able to name trustees or relieve them of their duties.
In a more creative trust, a loan director may be named to approve loans from the trust. This may provide the characteristics of a grantor trust, which causes the income it generates to be taxed at its creator's tax rate as opposed to the trust tax rate. Other options that can be put into a trust include appointment powers and the ability to name extra beneficiaries as needed.
Trusts may be a better planning tool than wills because they offer more flexibility to its creator. Assets held in a trust are considered outside of the estate for tax purposes. Furthermore, trusts allow great flexibility in determining how assets can be used by beneficiaries alive today and those who may be born in the future. Those who have any questions related to trusts may wish to speak to an attorney.