To create a Trust, a grantor gifts or sells his or her assets to a Trust. The Trust is administered by the Grantor or a Third Party, and that administrator is known as a Trustee. The Trustee has a fiduciary responsibility to manage all assets of the Trust to the benefit of beneficiaries.
Furthermore, the taxation of the Trust depends on the type of Trust, the relationship of the Grantor to the beneficiaries and/or Trustee, or the domicile of the Trustee, beneficiaries, and/or Trust assets, or a combination thereof.
References:
Bagchi, A. (2020). New York, D.C. Trust Taxes Face Greater Constitutional Scrutiny. Retrieved July 30, 2020, from https://news.bloombergtax.com/daily-tax-report/new-york-d-c-trust-taxes-face-greater-constitutional-scrutiny