A trust is an arrangement where assets are held by a trustee for the benefit of another person called the Beneficiary”. A revocable living trust is may be used as an alternative to creating a will. A revocable living trust is created by a person called the Settlor while he or she is living. The Settlor titles his or her assets in the name of the trust during his lifetime which is called funding the trust. The trust document indicates who is the settlor, the trustee and the beneficiary. Often when a revocable living trust is created the Settlor is also the Trustee and the Beneficiary during his lifetime, which allows him to manage the property in the Trust and receive the income and principal from the assets during his life. A revocable living trust is “revocable” while the Settlor is because he can change or cancel it at any time.
Upon the Settlor’s death, a revocable living trust becomes “irrevocable.” The trust document directs who should be the new Trustee if the Settlor becomes incapacitated or dies. The document also directs who are the new Beneficiaries of the trust’s assets after the settlor’s death. A trust usually avoids administration of the Settlor’s estate in Probate Court. A trust can also make it possible for Beneficiaries to receive regular income from the trust’s assets for a predetermined period of time.