"A trust is an equitable obligation, binding a person (trustee) to deal with property owned by him
(trust property as opposed to private property) for the benefit of persons (beneficiaries)."
Sir Arthur Underhill, 1945

In short, a trust is a contractual relationship. There are many types of trusts and many purposes for their creation. Trusts are primarily created for the management and distribution of assets during a person's life or after their death. A trust may be created for a surviving spouse, children, friends, business, charitable organizations or for the financial benefit of the persons creating the trust. Trust law is voluminous, but generally a trust has been lawfully created if properly funded, if a disinterested third-party trustee has properly held and maintained the trust assets and if the purpose of the trust is legitimate according to established trust law. A trust is comprised of four separate and distinct parts.

• Settlor
  Often called a grantor, a settlor is the person who creates the trust. A settlor determines the terms and conditions whereupon assets are to be inherited or disbursed. A settlor may not be the sole trustee and beneficiary simultaneously.
  
  
• Trustee
  The individual (or entity) who holds, manages and disburses the assets of the trust is called a trustee, and has a fiduciary responsibility to act in good faith and administer the terms and conditions of the trust agreement in accordance with general trust law principles.
  
  
• Beneficiary
  The person who is benefited by the trust (corpus) is known as the beneficiary and may be an individual, multiple people, a corporation, partnership, limited liability company, living trust or any combination thereof. A beneficiary may retain management control of the trust and has the rights to receive assets and profits from the trust. A beneficiary may not be the settlor and the sole trustee simultaneously.
  
  
• Trust
  The trust is the formal written agreement and the assets that comprise the trust (corpus). A trust becomes active, or activated, once it has been funded with assets. Funding requires the transference of asset ownership from the settlor to the trust. Once this transfer of assets is complete, the settlor no longer has legal or equitable title of those assets.

• Doctrine of Merger
  The doctrine of merger states that in the event a person is both the sole trustee and beneficiary of a trust, there is a fusing of legal and equitable title and the trust is terminated.
  
  
• Arms Length Regulations
  Arms length regulations require (irrevocable) trusts to utilize a disinterested third-party to act as the trustee or co-trustee to avoid the doctrine of merger. Similar to the laws of attribution, no disinterested third-party should include any member of your immediate family (father, mother, brother, sister, husband, wife, son or daughter), however arms length regulations also extend to any close friends or business contacts whose association to the trust (in a fiduciary capacity) may cause a conflict of interest and are therefore prohibited. It is prudent to consider the services of a reputable attorney, bank or company to provide fit and proper trustee services.

• Legal Title
  "A title that evidences apparent ownership but does not necessarily signify complete title or beneficial interest." - Black's Law Dictionary (9th Edition)
  
  Legal title is given to the person (trustee) to whom title to of assets are recorded, for and on behalf of the trust (beneficiary). The legal title holder does not have the right to use of, nor the ability to take possession of, nor the right to collect rents or profits of, trust assets.
  
  
• Equitable Title
  "A title that indicates a beneficial interest in property, which gives the holder the right to acquire the formal legal title." - Black's Law Dictionary (9th Edition)
  
  When the assets of a trust are finally disbursed, the beneficiary shall be able to exert equitable title and receive legal title to the trust property.

• Powers
  Trusts may be drafted to vest the power and duty of management of the trust to the beneficiary. The beneficiary then possesses the "power of direction" to instruct the trustee what to do in relation to the trust. Such power of direction is necessary as the beneficiary does not hold legal title to the assets of the trust and must instruct the trustee when to execute documents such as deeds, mortgages and leases. Additionally, the beneficiary may possess the power to terminate and replace the trustee with another trustee (service) at any time.
  
  
• Signatories
  Trusts may be drafted to provide for the use of a single signatory on behalf of the settlor. This signatory (co-trustee) is the person authorized to sign documents for and on behalf of the trustee, but only upon written direction of the beneficiary. A settlor may not be the sole signatory.

• General POA
  The General Power of Attorney for Property gives sweeping powers to the agent of your choosing to act on your behalf on a broad spectrum of areas. Virtually every aspect of your life could be handled by the person to whom you chose to entrust such powers should you become mentally incapable of continuing to manage your financial affairs.
• Durable POA
  The Durable Power of Attorney for Health Care gives a comprehensive range of powers to the agent of your choosing to act on your behalf with doctors, hospitals and other agencies in the event that your personal physician declares you, in writing, to be physically incapable of managing your own health care affairs.