Living Trust

A revocable living trust is a legal entity that you create declaring that you are holding certain property in trust. You retain the right to revoke the trust at any time, or to remove the property from the trust. Because the trust is revocable, it is treated as a fictional entity during your lifetime. You pay taxes on any trust income during your lifetime, and your creditors could access trust assets to pay your debts.

Upon your death, the trust becomes irrevocable and takes on a new life as a truly separate legal entity. Any property owned by the trust is not subject to probate because it is not owned by you or your estate at the time of your death.