A living trust is a trust that is created while an individual is still alive; in most cases, such a trust is referred to as revocable. This means that the terms of the trust can be changed at any time by the person who created the trust. It is different from an irrevocable trust in which it is difficult if not impossible to change its terms.
Living trusts will have a trustee, which may either be the person who created the trust or a trusted third party. The trustee is responsible for directing the trust both during the creator’s lifetime as well as after the creator of the trust passes on. While the living trust is similar to a will, it has one key benefit that a will does not.
If the creator of the trust becomes incapacitated, the trustee will manage that person’s estate according to the terms of the trust. This is beneficial because it allows an individual to personally name who will manage his or her property instead of the state appointing a guardian for that individual. Ideally, the person whom is chosen to manage the assets will do so with the best interests of that person and his or her family in mind.
Creating a living trust may be one part of effective estate planning. It may provide flexibility in how assets are managed during life and distributed after passing on. In the event that an individual becomes mentally incapacitated, his or her assets may still be managed in accordance with that person’s wishes. Therefore, this may be something that an individual would like to talk about with an estate planning attorney. An attorney may be able to draft and store relevant trust documents in accordance with state law.