It is, admittedly, difficult to pin down what exactly a trust is. We could tell you that it is a legal entity that is capable of owning property. You can't see it. You can't touch it. You can't speak to it. So what does a living trust really do?
A trust allows you to gather together in one document all your significant property. This is important if you want to make sure that your property is distributed easily and quickly after your death. The trust, not you, owns that property. This doesn't mean that you no longer have control of your assets. Since you, the grantor, will usually appoint yourself as the trust's initial trustee, you still have complete control of your property. You can do what you want with that property - you can even transfer some property out of the trust or add property to it. A living trust is an easy way to keep track of all your assets and manage them as a single unit. Most importantly, a trust allows you to provide for the quick and efficient distribution of your property to loved ones when you die.
A living trust is created with a document known as a Declaration of Trust. This is the legal document which names your beneficiaries, describes your trust property, and provides for the terms of its transfer. The living trust is managed by the trustee; in most cases, the initial trustee is the person who forms the living trust. You may later designate someone else or an institution, like a bank, to act as a trustee. The trustee is also responsible for managing the property covered by the trust.
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