What is a living trust?

A living trust is a formal legal document that sometimes can partially substitute for a will. In a living trust, the person creating it—called the grantor—transfers property (assets) into a trust, which is a type of financial account. Most often, the grantor is the trustee when it is created. The trustee administers the trust for his or her own benefit during his or her lifetime. The trust document also names a successor trustee, who becomes responsible for administering the trust after the grantor's death. A living trust is a revocable trust during the grantor's lifetime, which means it can be changed or terminated at any time at the grantor's discretion. It becomes an irrevocable trust after the grantor's death.