living trust

A living trust, also known as an inter vivos trust, is a legal arrangement established during a person's lifetime to hold and manage assets. Unlike a will, which outlines asset distribution after death and typically goes through probate, a living trust transfers ownership of assets to the trust itself while the grantor is alive.12

There are two main types:
* Revocable Living Trust: This type can be altered or canceled by the grantor during their lifetime. It can help avoid probate but generally does not offer tax benefits or protection from creditors.23
* Irrevocable Trust: Once established, this trust is very difficult to change. It can offer asset protection from creditors and potential tax advantages, but the grantor gives up control over the assets.23

Both wills and living trusts are governed by state law, and consulting an attorney is recommended for complex estates.2