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 an intervivos trust and a testamentary trust?

    Understand the differences between a testamentary trust and an inter-vivos (living) trust, and learn why each is important ... Read Answer >>
  2. 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 >>
  3. 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 >>
  4. How does the trust maker transfer funds into a revocable trust?

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  5. What is the difference between a revocable trust and a living trust?

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