What is a Living Trust?

A trust is merely an agreement, like a contract between two parties. The person establishing the trust (the “Settlor”) and the person holding the property (the “Trustee”) hold property for the benefit of another (the “Beneficiary”). In a typical living trust, these three legal “persons” are the same person; you. The term “living trust” means that the trust is established and funded during you lifetime, as opposed to a testamentary tryst which is created in your will and must go through probate to be funded. In order for a trust to be valid, binding instrument; all that is necessary is for the parties executing it to have the legal capacity to enter into a contract, including age and competency, and for the trust to actually own something (“the corpus”). To fund the trust, you can assign, deed and transfer your assets into the existing trust, including your real property. Once the trust is signed, dated and acknowledged by a notary Public, it is in full force and effect. Neither your trust nor will you need be recorded, with the exception that the deed transferring real property is usually recorded with the applicable Recorder’s Office.