What is a Living Trust?
There are a number of ways that trusts are classified. One classic approach is to characterize the trust in relation to the Settlor, the person who established the trust. A Settlor is alternatively referred to as a Trustor, Grantor or Donor.
A trust created during the Settlor’s lifetime is called an inter vivos (within the life of) trust. Today, an inter vivos trust is commonly referred to as a living trust. This is not a new legal creature, just a more user friendly term.
One of the many benefits of a living trust is to avoid probate. That is a court supervised legal process which validates a Will and distributes a Settlor’s property at his or her death. In many states, the probate process is statutory with fixed fees. In addition to avoiding the cost and time to probate an estate, a living will also avoids making a public record and is more private as compared to the probate process.
There are additional advantages to setting up a living trust, including possible tax savings and access to institutional trustees to administer the trust. Using professional trustees can be cost effective and fairly safe.
There are many legal professionals who know the ins-and-outs of living trusts, and can help you determine what is best for your particular situation.
Joseph Fedorowsky / Legal Blog
