living trust

Definition

A trust created for the trustor and administered by another party while the trustor is still alive. A living trust can be either revocable or irrevocable. A living trust avoids probate and therefore gets assets distributed significantly more quickly than a will does. It also offers a higher level of confidentiality, as probate proceedings are a matter of public record. Additionally, trusts are usually harder to contest than wills. On the downside, a living trust takes longer to put together than a will, and requires more ongoing maintenance. Although both a will and a living trust can be modified or revoked at any time before death, such changes are slightly more time-consuming for a living trust. Additionally, assets that a person wants to move to a living trust, such as real estate and bank or brokerage accounts, have to be retitled.

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