How is a trust created?

A trust is formally created using a written legal document called a “trust agreement.” The trust agreement reflects the terms of the trust as created by the Settlor. Though you probably do not ever think about it, you likely enter into oral trust agreements all the time. For example, if you asked a co-worker to hold a package for you while you are on vacation and give it to your niece when she arrives from out of town, you have created a trust wherein you are the Settlor, your co-worker is the Trustee and your niece is the beneficiary of the trust.