- Jessie Jimenez
There are 2 types of trusts: Living trusts...
And testamentary trusts, which are only relevant after the grantor dies.
Living trusts take effect while the grantor is still alive. In the case of revocable trusts, the grantor is often also the trustee. This can seem strange. Why set up a financial relationship where you give yourself the power to control you own money? Don't you already control your assets? Yes, of course you do. This is why a revocable living trust works a lot like a will, but is harder to contest after the grantor passes away. A new trustee can be named, and all the assets are already accounted for in the trust.
So what about an irrevocable living trust? Why would you give up control of assets while you're still alive? Come back next week to find out.
Personal Finance (Garmen and Forgue, 13 Edition, pp. 556-557)