What is a living trust?

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Living trusts are legal documents created by people who wish to entrust applicable assets or property to him/herself or other people while he/she is still alive. Similar to a will, a living trust contains all the details on who should control a certain property, and which assets are to be taken cared of by specific person among many other details. The legal will takes effect once the maker of the legal document dies while in living trusts, the desires of the property owner are carried out and applied without having to go through the long process of probate.

Living trusts may either be the revocable and the irrevocable type. Revocable living trusts simply mean that the specifications on the legal document may be changed or amended any time. Certain provisions indicated in the document may be altered later in life if the desire or need arises. Part of the document or even the entire contents may be changed if the living trust is made under the revocable type. No probate process is also needed in terms of the transfer of trust towards the specified beneficiaries but the appropriate estate taxes are still applied. The other type of living trust is the irrevocable type. In this type, the specifications indicated in the document are final and cannot be changed. With this type of living trust, a person is relinquishing or giving up all his/her rights to a certain property or asset to specified beneficiaries. With properties and assets given up in this way, no more estate taxes are applied.

Making a living trust is not necessary for the basic person but for those who have multiple assets and properties and those with complex family relationships, it may be appropriate to legalize every detail. For persons who are not married but have some property to dispose, living trusts may be the best way to specify wishes and desires regarding beneficiaries.

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