A Trust is a private contract between the Grantor(s) (person setting up the Trust) and one or more Trustees (the person(s) in charge of managing the Trust), for the benefit of the Beneficiaries. There are many different kinds of Trusts, used for different purposes. A Revocable Living Trust is one of the most-used. Among other things, it can serve as a method of estate planning that allows most of a person's assets to pass outside of probate, so court proceedings and expenses are largely avoided.
The Grantor is generally the Trustee to start out, and they have full discretion to use the assets in the Trust, give them away, or even to revoke the Trust. When the Grantor dies, the Trust becomes irrevocable, and a successor Trustee automatically takes over the duties of managing the Trust. The successor Trustee manages and distributes the Trust assets according to the instructions of the Trust document created by the Grantor.
A Revocable Living Trust is more expensive to set up than a Will, but it provides much more control over how and when assets are distributed. It can also provide protection from certain creditors, from division in divorce, and from bad decisions of beneficiaries. To learn more about how a trust works and whether it fits your planning goals, please call to set up an appointment with Than Cutler.