A "living trust" is the most common type of revocable trust. It can be used to achieve many estate plan objectives, including distribution of property, management of property upon death or incapacity, estate tax avoidance, and probate avoidance. In fact, almost any instruction you can image may be part of a living trust.
Living trusts are sometimes referred to as a "will substitute" because they do everything a will can do, but without probate. Nevertheless, living trusts are more complex than wills to create and maintain, so they are not the right choice for everyone. Living trusts are also usually more expensive to draft than a will.
A living trust is sometimes described as a "box" of property. The trust directs the management and distribution of property that is in the box. The process of transferring property to a trust is called "funding". A trust must be carefully drafted and funded to ensure that it will work as intended. Do not assume that simply having a trust means that your family will avoid probate, or that all estate administrative expenses will be eliminated.
For more information about how assets are distributed from a trust, see the section entitled "Asset Distribution by Trust".
John P. Tamboer, attorney
Estate Planning Law Group
5088 Corporate Exchange Blvd.
Grand Rapids, MI 49512