A family trust is a type of revocable living trust. Property and financial assets are transferred by the grantor (the owner) into the trust. The family trust then becomes the legal owner of all property transferred into the trust. A trustee (who can be the grantor) is in charge of administering the account. The terms and conditions placed upon the family trust can be altered by the grantor at any time while he/she is still living.

A family trust is often set up to protect assets during a person's life and to pass them directly to a surviving spouse upon the person's death. A family trust that is part of an AB trust can avoid estate taxes. A trust also bypasses the issues that may arise during probate. For example, it offers a way to simplify inheritance of property that is owned in multiple states. It is also much more difficult to contest the validity of a living trust than a will. Even if the family trust is contested, the assets are not frozen while the dispute is ongoing.