A living trust allows you to gather property together in one document in order to make sure that your assets are dispersed without difficulty and rapidly after your death. Once you contribute property to the trust, it, not you, has ownership of that property. A living trust is a means to track of all your assets and deal with them as one entity.

Even though you transfer ownership, forming a living trust doesn't mean that you lose control over what happens to your property. Since you, the grantor, will typically assign yourself to be the trust's first trustee, you retain complete power over your property. You can also shift property in or out of your living trust.

A living trust is formed with a legal document known as a Declaration of Trust. This document outlines the property in the trust, indicates beneficiaries, and describes the terms of transfer. The living trust is operated by the trustee; frequently, the initial trustee is the individual who creates the living trust. Later, you may designate someone else or even another entity, like a banking institution, to operate as a trustee. Additionally, the trustee handles managing all property included in the trust.

While setting up a living trust takes more preparation and can be more costly than a traditional last will and testament, as an estate planning tool it is very valuable. Living trusts can help your beneficiaries avoid certain estate taxes if prepared correctly. Additionally, establishing a living trust will allow you to hand over management of your assets to someone else in the event that you become unable to handle your assets on your own.

For more information about living trusts, visit our partner LegalZoom. Here, you'll find a free, online legal library providing all the information and resources you need when considering a living trust to manage your assets. The Law Library Topics provide general living trust information, and FAQs answer some of the most common questions people ask. These features, combined with the Glossary and Useful Resources, allow you to better understand the estate planning benefits provided by a living trust.

LegalZoom is not a lawfirm and can only provide self-help services at your specific direction. Information contained above is subject to change and is not applicable to every state. Visit LegalZoom.com for specific state-by state-documents.

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