what is a living trust?

Answer 1

A living trust (revocable living trust or inter vivos trust) is a type of trust created for the purpose of holding ownership to an individual's assets during the person's lifetime and for distributing those assets after death.

In the United States it is often used because it may allow assets to be passed to heirs without going through probate. Avoiding probate may save some costs (the probate process can charge a fee based on the net worth of the deceased), time, and maintain privacy (the probate process is public, while distribution through a trust is not). Living trusts also can be used in planning for the contingency of incapacity. The Grantor may be a trustee or co-trustee, with the trust instrument providing that either trustee alone may act on behalf of the trust. The trust instrument may also provide that other the co-trustee shall act as sole trustee if the Grantor becomes incompetent.

Despite the advantages, there are also some negative aspects to think about when considering an inter vivos trust. Beneficiaries do not save on estate or state inheritance taxes. Also, they are expensive to set up, and the expense is immediate, not after the grantor's death.

A common misunderstanding regarding living trusts is that they shelter assets from having to pay the estate tax. This is not correct. However, a married couple having a living trust can effectively double the estate tax exemption amount (the amount of net worth above which an estate tax is levied) by setting up the trust in a certain way.

The below link has more information on the parties involved and the process to set one up.

Answer 2

This is a legal arrangement, usually drafted by an estate attorney, creates a separate entity called a Living Trust. A Living Trust is called that simply because it is created while you're alive (as opposed to a "testamentary" trust created after death).

The Parties Involved

The Living Trust document itself names three different parties. The individual (or couple) that establishes the Trust is named the Grantor (also referred to as the Trustor).

The Trustee is the person named by the Trust as the controller of the Trust's assets (and in many cases, the Trustees are the same people as the Grantors).

On the receiving end, the Beneficiaries are the heirs that will benefit from the Trust once the Grantor's have passed away.

Essentially the living trust helps to keep your estate out of probate.

Answer 3

when you trust a liveing person...or when you still trust someone?