Do I need a trust or living trust? - Maybe neither.

What is a Trust? - Just about anything a client would like it to be.  In simplest terms, a trust is the delivery of property by one (the "Trustor") into the care of another person (the "Trustee") for the benefit of others (the "Beneficiaries").  These roles can be filled by a natural person or a legal entity such as a corporation or charity.  More than one person can fulfill any single role.  One person may be in two or more categories.  The Trustee and Beneficiary may not be identical.

What is a living trust? - The term "living trust" probably refers to a revocable trust where all the trustmaker's property is granted to a trust, the trustmaker acts as trustee, with the trustmaker as primary beneficiary and the trustmaker's children as the residual beneficiaries.  Or some variation thereof including spouses, other familial generations and charity.  The bottom line, unlike a "living will" which is very different from a "last will and testament," a living trust is just a trust made for you during your lifetime.

Are there such things as testamentary trusts? - Absolutely.  An individual is free to have trusts created and funded by will through the probate process.  Even more common are the creation of trusts that are funded by life insurance proceeds at the time of death.  This is an excellent planning tool for couples with minor children.

A typical example is a husband and wife moving all their property and investments into a trust, name themselves as co-trustees, specify themselves as current beneficiaries with their children as surviving beneficiaries.  That is, when both current beneficiaries are deceased, then any surviving children will become the beneficiaries.  The trust could continue in operation during the children's lives, or the property could be distributed to them outright.

This is just one of many potential examples.  While there are some limitations, almost any reasonably imagined arrangement is possible.

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