In a living trust the trustee is given responsibility for managing an individual’s assets for the benefit of the eventual beneficiary. A living trust is designed to allow for the easy transfer of the trust creator or settlor’s assets, while bypassing the complex and costly legal process of probate. Living trust agreements designate a trustee who holds legal possession of assets and property that flow into the trust.
Understanding Living Trusts
Living trusts are managed by a trustee who typically has a fiduciary duty to manage the trust prudently in the best interests of the trust’s beneficiary or beneficiaries designated by the trust settlor, also called a grantor. Upon death of the settlor, these assets flow to the beneficiaries according to the grantor’s wishes as outlined in the trust agreement. Unlike a will, however, a living trust is in effect while the settlor is alive and the trust does not have to clear the courts to reach its intended beneficiaries.
