Instead, those assets and that property officially belongs to the trust once the transfer has been consummated.Īlthough the person who owned the assets prior to the creation of the trust typically will appoint him or herself as the trustee during his or her lifetime, this is not necessarily always the case. Once a living trust has been created and the property transferred to the trust, the assets and property in the trust does not even belong to the person who created the trust in the first place. Primarily, the trust sets forth the terms pursuant to which the the trust is to be governed and pursuant to which the assets eventually will be transferred or disbursed. The living trust is also known as a “revocable living trust”, which means that unlike an irrevocable trust, the revocable trust can be revoked during the grantor’s lifetime.Ī living trust appoints a person, known as the trustee, to manage the assets and property in the living trust, both during the grantor’s lifetime as well once the grantor has died. The name “living trust” is used to denote that the trust is set up while the grantor, or the person whose assets or property will be transferred to the trust, is alive when trust is established and this transfer of the grantor’s assets and property takes place when the grantor is still alive. What Is a Living Trust?Ī living trust is an estate and asset planning device that is often used to protect assets from creditors and to assist in avoiding having an estate pass through the probate process and incur estate taxes when a person dies. Understanding how to set up a living trust as part of your estate plan is an important step, even if you hire an attorney, and this insight is the focus of this article. In death, your living trust allows your chosen trustee to administer your estate according to the terms of the trust you set forth in advance. In life, the living trust allows your trustee to take charge of your estate if you are diagnosed as incapacitated.

A revocable living trust allows you to set up a plan that protects your estate both in life and in death.

Setting up living trust