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Living Trusts

2. Definition of a Living Trust

A trust is an arrangement in which one or more people manage or take care of property for someone else's benefit. A living trust is a trust that is created during your lifetime. In other words, while you are still alive, you transfer title to your property from your name to that of the trustee of the living trust. You can use the trust to gather your property under one document, so that the property is distributed efficiently after your death.

When you put your property into a trust, the trustee of the trust owns the property – you are no longer the legal owner of the transferred assets. This doesn't mean you have no control of your property. Since you will probably be your trust's initial trustee, you will still be in charge of your property. You can do whatever you want with it - you can leave it alone, take it out of the trust, or use it as you had been before the trust was created. A living trust is an easy way to organize your assets and manage them as a single unit. Most importantly, a trust allows for an efficient property distribution when you die.

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A living trust is created by a document called a declaration of trust or trust agreement. The declaration of trust (or trust agreement) includes the names of your trustees, beneficiaries, describes the trust property, and provides the terms of the property transfers.

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