A living trust is a legal document established during a person’s lifetime which specifies how their property will be managed before and after their death, as well as provides a plan for how those assets, and the income earned by the trust, are distributed after his or her death.
Once the trust is established, all the assets of the person who created the trust ought to be transferred into the trust. Joint living trusts are also possible. They simply combine the assets of a husband and wife into one single trust, governed by one single trust document.
Trusts are usually “revocable”, which means that the person establishing the trust can make changes to the trust at any time as long as they are competent to do so. If the person establishing the trust should become incapacitated or disabled, the trust is in place to manage his or her financial affairs, and the successor trustee can then take over the management of the trust.
In most situations, the person establishing the trust is the Trustee – the person who manages the trust. The trust also names a successor trustee. A living trust is not subject to probate.