A living trust (also known as a revocable or inter vivos trust) is a trust that holds your assets. The assets are administered for your benefit during your lifetime and transferred to your beneficiaries upon your death. This process typically occurs without the need for court involvement.
There main persons involved are the trustor or settlor, the trustee, and the successor trustee.
The trustor or settlor is typically you – that is, the person(s) that establishes the trust. The trustee manages the trust and the assets. Most people name themselves as the trustee and by naming yourself as trustee, you can remain in control of the assets during your lifetime.
The successor trustee is a person or institution who will take over as the trustee and manage the trust’s assets if you should ever become unable to do so. Your successor trustee would also take over the management and distribution of your assets when you die.
With this type of trust, you can revoke or change any terms of the trust at any time as long as you are still competent. The terms of the trust generally become irrevocable when you die. However, in some trusts created by married couples, some or part of the trust may continue to be revocable by the surviving spouse.
A living trust does not, however, remove all need for a will. Generally, you would still need a will — known as a pour over will — to cover any assets that have not been transferred to the trust.