A living trust, also called a revocable living trust, is an agreement between you, the creator of the trust, and you, the owner and manager of the trust estate. You, as owner and manager, agree to hold title to property and manage the trust property for the benefit of the beneficiaries of the trust (you are also the beneficiary). A living revocable trust is named this way because it goes into effect when you are alive and can be changed or revoked at any time while you are alive and well. In your trust document, you will nominate a back-up trustee to manage or distribute all of the property of the trust if you are incapacitated or deceased.
There are four primary benefits of creating a revocable living trust:
1. A revocable living trust empowers your estate to avoid probate.
2. A revocable living trust helps you plan for the possibility of incapacity.
3. A revocable living trust helps you to protect your beneficiaries by allowing maximum flexibility and control over the distribution of your estate.
4. A revocable living trust allows you to minimize estate taxes and expenses to your beneficiaries.