An inter-vivos trust is created by the donor who is still alive to hold property for the benefit of another. The donor may wish to set funds aside for a beneficiary(ies). The donor may not wish for other beneficiaries to know of assets that have been given to the beneficiary under the trust. The assets in the trust do not fall into the estate upon his or her death.
The donor, who is called the settlor, agrees to put certain assets into the trust and outlines the terms and conditions of the trust, who benefits from them (beneficiary), and who will hold the assets in trust (trustee).
The settlor is deemed to have disposed of the assets when placing them in the trust and so should be aware that capital gains may be payable on any increase in value since the date of purchase, unless an exemption such as the principal residence capital gains tax exemption is available.
There will be a cost of setting up the trust as well as an on-going cost so careful consideration should be given prior to setting up the trust.