A trust, like a corporation, is an entity that exists only on paper but is legally capable of owning property. A flesh and blood person, however, must actually be in charge of the property; that person is called the trustee. You can be the trustee of your own living trust, keeping full control over all property legally owned by the trust. Upon your death or disability, a “successor trustee” chosen by you — usually a spouse, child or other family member — can take over for you as trustee.
There are many kinds of trusts. A “Revocable Living Trust” is simply a trust you create while you’re alive, rather than one that is created at your death under the terms of your will. You can change or revoke it at any time during your lifetime. However, depending on the terms of the trust, portions of a joint revocable living trust created by a husband and wife may become irrevocable upon the death of either spouse.
All living trusts are designed to avoid probate. Rather than going through the court process, the successor trustee, the person you appointed to handle the trust after your death, simply transfers ownership to the beneficiaries you named in the trust. Some trusts, such as A B trusts, also help you reduce estate taxes, and others let you set up long term property management, such as providing for a disabled heir or assisting with a grandchild’s education.