A living trust is a type of Trust that allows its creator, the Grantor, to retain control while they are still alive, and change its terms as they see fit.
In this situation, the grantor is also the Trustee, the person who manages the trust's Assets and real estate property. They retain control of how assets are distributed to Heirs and Beneficiaries, and can revoke it entirely at any time.
Living trusts often become Irrevocable upon the grantor's death, and assets are then distributed to beneficiaries according to its terms.
Living trusts are Estate Planning tools that help trustees, Executors, Surviving Family members and other beneficiaries avoid Probate, and more easily Settle the Estate.
Some of the benefits of using a living trust include:
Avoiding probate: Assets held in a living trust do not go through the probate process, which can be lengthy, time-consuming, public and costly.
Asset management: The grantor can appoint a trustee to manage assets in the event of their incapacity or death.
Ensuring privacy: Unlike a Will, which becomes part of the public record during probate, a living trust is a private document not subject to public disclosure.
Providing for beneficiaries: The grantor can specify how and when assets are distributed, which can be helpful if beneficiaries are minors or have special needs.
Living trusts can be either Revocable or Irrevocable.
A revocable living trust allows the grantor to change its terms or terminate it entirely during their lifetime. Taxes owed from its assets must be paid by the grantor while they are living.
An irrevocable living trust cannot be changed or terminated once it's been established and can reduce taxes on the deceased's estate because the deceased does not own the assets, the trust does.
Living trusts can be a useful tool for estate planning, but can be complex to create and often an experienced Estate Attorney is hired to help draft them.