What is a trust?
A trust details your wishes about property that is held within the trust and specifically conveys how to distribute the property to your beneficiaries. A trust is a formal and fiduciary relationship where someone, the trust maker (trustor), appoints someone else (trustee) to hold title to and manage trust property for the benefit of one or more people (beneficiaries). Trusts avoid probate because they are private contracts that transfer ownership of your property so that the court does not have to after your death thus avoiding probate.
What is a revocable living trust?
A revocable living trust is the most common type of trust and is often also referred to as a living trust or revocable trust. It is created and in effective when the trustor is alive (living) and allows the trustor to make changes to it (revocable). The main purpose of a revocable living trust is to pass assets from generation to generation without probate.
What is an irrevocable living trust?
An irrevocable living trust is a trust that can't be modified or terminated without permission of the beneficiary as the trustor has transferred assets into the trust and effectively removed all of his or her rights of ownership to the assets and the trust.
What does it mean to fund a trust?
Funding is the process of transferring property into the trust. The trust must hold title to the property. Funding must take place during the trust maker’s lifetime. If there is any property that has not been funded to the trust, that property must generally go through state probate proceedings upon death before anyone can do anything with the property.
What is the difference between a trust and a will?
Both a will and trust transfer assets to beneficiaries, but they differ in how the assets are transferred. A will required going through a lengthy, costly, public process called probate while a trust can be handled privately and effectively.