Living trusts are identified by the word "living" because you create them while you're alive, and you have the ability to change them while you're alive. After your death, the trust will be set in stone and no one will be allowed to change it. This flexibility while you're still alive is one of the many benefits received from an estate planning perspective when someone chooses to set up a living trust.
Let's look at some of the benefits of such a trust:
You stay in control of your trust: Your living trust gives you all the control of the trust and the assets inside it. As long as you're alive, you'll still be able to alter and make changes to your living trust, which is not like other types of trusts that are usually permanent and unalterable.
You allow your beneficiaries to bypass probate: The beneficiaries of your trust will not have to go through the probate process because your trust proceeds will go directly to them -- in accordance with the terms of the trust -- after your death. Of course, if the terms of the trust so dictate, the assets might not go immediately to your beneficiary, but they will still never be delayed or tied up in the potentially costly probate process.
You protect your beneficiaries from creditors: A creditor is not allowed to pry open the trust and remove its contents, just because the beneficiary owes money. This could help your beneficiaries who are struggling with debt problems.
When you're ready to do what's best for your family and your estate plan, you might want to ask an estate planning attorney about whether a trust is the right asset protection method for you. In some cases, they can be enormously beneficial from a savings and financial-planning perspective.