By: Martin M. Shenkman, CPA, MBA, JD
A "living trust" , also called a "loving trust" by some (its just a marketing gimmick) is a trust that is established during your lifetime. In legal jargon, this is called an "inter-vivos" trust. A "trust" is a legal entity created by a document or contract called a trust. Any type of trust created while you are alive is an inter-vivos or living trust. The "living trust" most commonly used is a revocable living trust (see that term in the glossary) which is typically used to minimize the costs of probate (although that is far from the only use, and is not worthwhile in many cases). Other types of living trusts include insurance trusts designed to own insurance policies to protect them from tax, claimants, and irresponsible heirs. Trusts for children and grandchildren are also commonly set up while you are alive as "living trusts".
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