What is the difference between a living trust and a testamentary trust?

A living trust and a testamentary trust are two different types of trusts established under estate planning law in North Dakota. While both are designed to help an individual manage their assets and reduce their estate taxes, there are some key differences between the two. A living trust is a trust established during an individual’s lifetime and is generally revocable or changeable. This type of trust is ideal for those individuals who want to have control over their assets during their lifetime and who want to avoid probate upon their death. Any property transferred into the trust is managed by a trusted third-party - the trustee - according to the wishes of the grantor, the individual who created the trust. A testamentary trust, in contrast, is a trust created after an individual’s death and is typically irrevocable. This type of trust is established through the individual’s will and is generally used to manage a certain asset or assets that will be passed down to heirs or beneficiaries. Testamentary trusts can also help reduce the amount of estate taxes an individual may have to pay because the assets are no longer part of the individual’s estate once the trust has been established. Overall, both living trusts and testamentary trusts are important tools in estate planning law that can help individuals reduce their estate taxes and manage their assets. However, they serve different purposes and have different rules that need to be followed. It is important for anyone looking to establish either type of trust to consult an estate planning attorney in North Dakota to understand all the laws and regulations surrounding these trusts.

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What is the difference between a living trust and a testamentary trust?

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