A trust is merely a special agreement between 3 parties; The settlor, the trustee and the beneficiary. The classic definition of a Trust is (from Underhill & Hayton, Law of Trusts and Trustees):
"A Trust is an equitable obligation, binding a person (called a Trustee) to deal with property owned by him (called Trust property, being distinguished from his Private property) for the benefit of persons (called Beneficiaries or, in old cases, cestuis que Trust), of whom he may himself be one, and any one of whom may enforce the obligation."

The Settlor is the transferor of the assets into the trust. Any kind of asset can be transferred, funds, shares, cars, boats, real estate and even non entities such as patents or rights. Once the assets have been transferred into the trust this can not be revoked. Once the Settlor has transferred all the assets into the trust he can legally declare that he does not then own them. This is of special interest in cases of bankruptcy, divorce and inheritance or legal claims. Trusts are one of the most preferred methods employed by US medics to protect their assets in case of malpractice claims being  brought against them.  

The trustee is the official manager of the trust. Officially the trustee must be independent from the Settlor and has all rights and full control over the actual running of the trust. Obviously few people would wish to pass that amount of control over their assets to a third party so generally the trustee will always act unofficially on instruction from the Settlor. It is possible to draft a separate agreement between the Settlor and trustee ensuring the Settlor retains full control. In order to act as trustee over any trust, the trustee must hold a special license. CSR have the benefit of using the services of a long established and reputable trustee. 

As the name suggests, the Beneficiary is the person or persons who finally receive the assets from the trust. The Settlor can be a named Beneficiary. All entitlements to beneficiaries must be set at the commencement of the trust and can not be revoked or changed. Once the beneficiary has received the assets from the trust he is then liable to declare this and pay due taxation. The Beneficiary can receive regular payments from the trust, for example from the interest or can wait for the expiry of the trust and receive all assets and interest in full.
 
The three parties are bound by a fiduciary relationship set out in the agreement whereas assets are transferred to a “trustee” who is required to administer the trust assets for the benefit of specified beneficiaries strictly in accordance with the terms of the trust.
 
This fiduciary structure offers great flexibility over the management and distribution of the assets.  Another advantage of a trust is that assets that belong to the trust can be seized. Further, trusts are exempt from taxation.
 
Trusts can be formed in various jurisdictions for example in Cyprus, BVI, Panama, Cook Islands, Nevis, Isle of Man, Belize.
These jurisdictions and specifically the last four have strong privacy laws that favor trust beneficiaries, and when legal structures are integrated with offshore bank accounts and companies, your assets are protected against seizure. Many attorneys will claim that in order to be 99.9% judgment proof, an offshore trust is a key element to your protection plan. This all starts with the right jurisdictions.
 
The backside of creating a trust is that a Trust cannot engage in business but purely manage and protect existing assets. Also, even though trusts are exempt from taxation, the beneficiaries are liable for taxaion upon payout of the assets. Lastly, it is almost impossible to replace the trustee.
 
If the disadvantages of creating a trust mean something to you, then we suggest to set up a foundation.