Living Trust

What is a 'Living Trust'

A living trust is a property interest created during a person's life that allows easy transfer of assets without going through the process of probate. A living trust is an agreement where the trustee holds the legal possession of a fund or assets that belong to another person, the beneficiary, and it is created while the person is alive. This is different compared to other types of trusts that are created through the person's will.

Also known as inter-vivos trust.

BREAKING DOWN 'Living Trust'

There are two types of trusts: inter-vivos (living) trusts and testamentary trusts. Testamentary trusts are trusts that are established through a last will and testament, whereas living trusts are created while the person is alive. The advantage of establishing a living trust is that assets do not have to go through probate, which can be costly and take a lot of time.

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RELATED FAQS
  1. What is the difference between revocable and irrevocable intervivos trusts?

    Learn what an inter-vivos trust is, the difference between an irrevocable and a revocable inter-vivos trust, and why it is ... Read Answer >>
  2. How is maintenance of standard of living for survivors accomplished in estate planning?

    Understand what elements of an estate plan can assist in creating certainty for survivors that allows them to maintain their ... Read Answer >>
  3. What happens when a will and a revocable trust conflict?

    Learn why a revocable trust supersedes a will, but only for the assets held in the trust, when there is a conflict between ... Read Answer >>
  4. What are the requirements that a trust needs to meet to be qualified?

    The requirements that a trust must meet to be qualified are as follows: The trust must be a valid trust under state law or ... Read Answer >>
  5. Is there a time limit on collecting on the trust fund?

  6. Do I need a living trust if I have assets?

    We have total assets of about $1.4 million. Most of them are held jointly with my spouse, except our separate IRA accounts ... Read Answer >>
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