What is a Living Trust?

A living trust is set up during someone's lifetime. Most often this is done to avoid the process of probate and thus avoid substantial cost in taxes for assets to be passed as inheritance. It also improves privacy since the probate records are available to the public. It is a trust created during the life of a person, usually to save money on taxes since these trusts cannot be taxed. It can also be used to manage property long-term. They can be designed to safeguard someone's financial privacy, and to monitor and restrict the use of that person's money if they should become incapacitated or unable to make decisions. Living trusts allow assets to be passed to their heirs without going through any kind of probate processes. Setting up a trust often costs more than making a legal will.