Basically there are two kinds of trusts, living trusts and testamentary trusts. The living or inter vivos trust is created and made effective while the trustor is living. A living trust is in essence an agreement between the trustor and the trustee and may be revocable or irrevocable.
The testamentary trust is so-called because it is established under the provisions of a last will and testament. The testamentary trust does not become effective until the will has passed through probate. Since a testamentary trust does not go into effect until death of the owner, there is no tax saving in his estate. However, the trust may be drafted to save estate taxes in the estates of the beneficiaries. A testamentary trust is also useful when the heirs are minors or inexperienced in money matters.