A living trust, also known as a revocable trust, is a powerful estate planning tool that allows you to place your assets into a trust during your lifetime while maintaining complete control over them. Unlike a will, which takes effect only after death, a living trust becomes active the moment it is created and funded. The trust creator (called the grantor) typically serves as the initial trustee, managing the assets for their own benefit during their lifetime, and names a successor trustee to take over management and distribution of the assets upon their death or incapacity.

One of the primary advantages of a living trust is its ability to avoid probate, the court-supervised process of validating a will and distributing assets. Assets properly held in a living trust pass directly to beneficiaries without court intervention, potentially saving significant time and money while maintaining privacy since, unlike probate proceedings, trust administrations are not part of the public record. This privacy benefit can be particularly valuable for families who wish to keep their financial affairs confidential or who own property in multiple states, as it eliminates the need for ancillary probate proceedings in each state where property is owned.

Living trusts also offer superior incapacity planning compared to wills. If the grantor becomes unable to manage their affairs due to illness or disability, the successor trustee can step in seamlessly to handle financial matters without the need for court-supervised guardianship or conservatorship proceedings. Additionally, living trusts offer flexibility, as they can be amended or revoked during the grantor's lifetime to accommodate changing circumstances, family dynamics, or financial situations. However, it's important to note that living trusts must be properly funded to be effective – simply creating the trust document without transferring assets into it will not achieve the desired benefits.