A living trust is a legal arrangement created during an individual's lifetime to hold and protect their assets and specify how those assets are to be distributed after their death. It allows the person, called the grantor, to transfer ownership of assets into the trust, which is managed by a trustee for the benefit of designated beneficiaries. The grantor can often act as the trustee while alive and name a successor trustee for when they die or become incapacitated. Living trusts help avoid the probate process, which can be lengthy, public, and costly. Living trusts come in two main types: revocable (where the grantor retains control and can change or revoke the trust during their lifetime) and irrevocable (where the grantor gives up control of the assets, offering potential benefits like asset protection and tax advantages). The trust takes effect while the grantor is alive, unlike a will that only takes effect after death. A living trust can also designate a successor trustee to manage the assets if the grantor can no longer do so, ensuring smooth management and distribution of assets without court involvement.
