Living Trust: How Does a Living Trust Works?

A living trust is more or less similar to a last will and testament. However, it poses advantages over a last will in a number of ways. But even though it's advantageous, it doesn't mean that you need it. For all you know, trust is not suitable to people from all walks of life and to people of all ages. There is a certain group of people that can take full advantage of it. These are the people who have large estates or those who seem to be nearing death.

A trust becomes effective when you transfer properties or assets into its funds. By transferring your properties or assets, you are giving up the ownership and the control of them. The trust now holds the ownership or the title of those properties you transferred. However, you may retain the right to control all those properties if you decide to become the trustee of the trust.

Also called as a revocable living trust or family trust, it is a legal document that puts three parties together, namely, the grantor or the creator, trustee(s), and the beneficiaries. The grantor or the creator sets up the family trust. This can be you. The trustee can be you or another person or entity who holds the right to manage the properties listed in the funds of the family trust. The right to manage denotes the right to sell, buy, borrow and transfer any or all of the properties. The beneficiaries are the people who are set to benefit from the family trust. A trustee successor is a person whom you delegated to become the trustee in your stead the moment you die and the beneficiaries are not yet in the right age to manage their inheritance.

Because a trust is a legal document, you need an attorney and his or her signature. These days, it isn't burdensome locating an attorney. Several websites offer legal services for the creation of a trust, a living will, and also a divorce online.