A living trust is a trust created during the person’s lifetime to hold and manage property.
Why It Matters
Living trusts matter because they are a common estate-planning tool for managing assets during life and for directing how those assets are handled later. They can play a different role from a will in planning and administration.
Where It Appears
Living trusts appear in estate planning, incapacity planning, probate avoidance discussions, trust administration, and family wealth management.
Practical Example
A person transfers certain assets into a trust during life and sets rules for management and later distribution. That arrangement may be a living trust.
How It Differs From Nearby Terms
A will directs post-death distribution through probate. A living trust is created and funded during life. A trust is the broader concept, while a living trust is one specific type of trust.
Related Terms
Knowledge Check
- When is a living trust created? It is created during the person’s lifetime.
- How is a living trust different from a will? A living trust exists during life, while a will mainly directs distribution after death.