The best living trust definition is a written legal document which substitutes for a will as your primary estate planning vehicle. When you have a trust you transfer your assets such as your home, financial accounts and personal property to the trust. In addition you change the beneficiary or contingent beneficiary of retirement accounts and life insurance to the trust. These assets are then administered for your benefit during your lifetime, and either continue to be held or transferred to your beneficiaries when you die.
The creator, also called the grantor, of the trust usually names him or
herself as the initial trustee in charge of managing the assets. This
allows the grantor to remain in control of the assets during his or her
lifetime. For all practical purposes under this living trust definition,
nothing changes in the way the grantor manages or controls the assets
after they are put in trust. The only difference is the named owner.
A successor trustee is named in the document, usually a family member or
friend but sometimes an institution such as a bank or trust company.
This successor trustee then will manage the trust assets for benefit of
the grantor if the grantor becomes disabled and for the contingent
beneficiaries after the grantor dies.
This living trust definition is for the revocable living trust. It is
also sometimes referred to as a revocable inter vivos or a grantor
trust. It may be revoked or amended at any time by the grantors as long
as they are still competent.
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