The Living Trust or Revocable Trust
A commonly used trust in estate planning is known as a, “Living Trust” or “Revocable Trust”. An example of this type of trust can be where you give your property to an entity you create that is legally allowed to own property. You and the entity, e.g. the, “Smith Family Trust”, have a written agreement that the entity will make that property available to you during your life, but when you die your brother (whomever) becomes the trustee who then gives the trust property to your child.
In this case you, during life, are typically all three elements of the trust – you are the “trustor”, the “trustee” (the one who runs the entity, like a president of a corporation) and the “beneficiary”. But when you die, the trustee and beneficiary will be different. In this example, when you die your brother becomes the trustee and your child becomes the beneficiary. The trustor, the person that creates the trust, never changes.
The benefit of a “Living Trust” is that property owned by the Trust can be given on your death to the beneficiaries without the need for probate.
It is called a “Living Trust” or “Revocable Trust” because it is created when the trustor is still alive and, typically, it remains revocable or amendable by the trustor during his or her life.
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