What is a living trust?

A Living Trust is a legal document created to hold and manage an individual’s assets during their lifetime and distribute them after their death. It is also known as an “inter vivos” trust. A Living Trust can be either revocable or irrevocable. A revocable Living Trust can be changed or revoked at any time, and the trust assets will remain under the settlor’s (the person setting up the trust) control. The assets can be moved in or out of the trust at any time, and the settlor can change the terms of the trust. This flexibility allows the settlor to respond to life events like marriage, divorce, or the addition of a new beneficiary. An irrevocable Living Trust, on the other hand, cannot be changed or revoked. The settlor loses control of the trust assets and are no longer able to manage them. They remain in the trust and the settlor no longer has the power to make changes to them. This type of trust is beneficial for reducing taxes and protecting the assets from creditors and predators. In Texas, Living Trusts allow settlors to avoid probate, which is the court process of collecting, sorting, and distributing the assets of the deceased. Instead, the assets are held in the trust until the settlor’s death. At that point, the trust directs the distribution of the assets according to the settlor’s wishes.

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What is a living trust?

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