Definition of Living trust:
A trust which is created during the lifetime of the settlor.
A living trust is a legal document, or trust, created during an individual's lifetime where a designated person, the trustee, is given responsibility for managing that individual's assets for the benefit of the eventual beneficiary. A living trust is designed to allow for the easy transfer of the trust creator or settlor's assets while bypassing the often complex and expensive legal process of probate. Living trust agreements designate a trustee who holds legal possession of assets and property that flow into the trust.
Revocable trust created by transfer or gift of property from its living creator (trustor) to one or more beneficiaries as an estate planning device. Its main objective is to avoid probate, or to achieve a speedy-transfer of assets. However, it does not protect the trust assets from the trustors creditors.
Living trusts are managed by a trustee who typically has a fiduciary duty to manage the trust prudently in the best interests of the trust's beneficiary or beneficiaries designated by the trust settlor, also called a grantor. Upon the death of the settlor, these assets flow to the beneficiaries according to the grantor's wishes as outlined in the trust agreement. Unlike a will, however, a living trust is in effect while the settlor is alive and the trust does not have to clear the courts to reach its intended beneficiaries when the settlor dies or becomes incapacitated. .
How to use Living trust in a sentence?
- Living trusts can be either irrevocable or revocable.
- A living trust designates a trustee to manage assets for the beneficiary, while the grantor is still alive.
- Trustees with fiduciary duty manage trusts according to the beneficiary's best interests.
Meaning of Living trust & Living trust Definition