Lifetime Trust vs Living Trust: What’s the Difference?

When managing your money and property, you might have heard about trusts. Two common types are Lifetime Trusts and Living Trusts. Both can be useful, but they work differently. Let's break down what each type of trust is, how they work, and how they differ.

What Is a Living Trust?

A Living Trust is a legal tool that helps you manage your property while alive and after you pass away. Here's how it works:

1.Creating the Trust: You create the trust and transfer ownership of your property into it. This means that the trust, not you, owns the property.

2. Managing the Trust: As the trust's creator, you can also be the trustee, which means you manage the property and make decisions about it.

3. Changes and Control: Since it's a revocable trust, you can change or cancel it anytime as long as you are alive and capable.

What Is a Lifetime Trust?

A Lifetime Trust is a type of trust designed to benefit your beneficiaries for their entire lives. The importance of a Living Trust lies in its ability to offer more control over your estate and protect your loved ones from potential delays and costs associated with probate. Here's how it differs from a living trust:

1.Purpose: The main goal of a Lifetime Trust is to provide financial support to your beneficiaries over their lifetimes. It often continues to manage and distribute property even after your death.

2. Creation and Management: You create this trust, which starts working immediately. You can also be the trustee or choose someone else to manage it.

3. Irrevocable or Revocable: Lifetime Trusts can be either revocable or irrevocable. If it's revocable, you can make changes or cancel it. If it's irrevocable, it cannot be changed once it's set up.

Critical Differences Between Lifetime Trust and Living Trust

1.Purpose and Duration:

• Living Trust: Mainly used to manage your property while alive and ensure it's distributed according to your wishes after you die.

• Lifetime Trust: Focuses on providing ongoing support to beneficiaries throughout their lives. It often lasts longer and distributes benefits even after you pass away.

2. Flexibility:

• Living Trust: Flexible and can be changed or canceled as long as you're alive and capable.

• Lifetime Trust: It can be flexible if revocable but irrevocable; it cannot be changed once established.

3. Management:

• Living Trust: You can manage it yourself or appoint someone else.

• Lifetime Trust: Managed by the trustee, who could be you or someone you trust, and continues to manage assets for the benefit of your beneficiaries

4. Benefits to Beneficiaries:

• Living Trust: Provides a way to transfer property efficiently after your death, without going through probate.

• Lifetime Trust: Ensures your beneficiaries receive financial support throughout their lives, not just after you pass away.

When to Use Each Trust

• Living Trust: Consider a Living Trust if you want to manage your property during your lifetime, and make sure it goes to your chosen beneficiaries after you die without going through probate.

• Lifetime Trust: Opt for a Lifetime Trust to provide long-term support to your beneficiaries and ensure they receive benefits throughout their lives, even after you are gone.

Conclusion

Understanding the difference between a Lifetime Trust and a Living Trust can help you make informed decisions about managing your property and providing for your loved ones. A Living Trust is excellent for managing and distributing your property while alive and after you pass away. A Lifetime Trust focuses on providing ongoing support to your beneficiaries over their lifetimes.

By knowing how each type of trust works, you can choose the one that best fits your needs and goals. If you need help determining which trust is right for you, talking to a legal expert can help you make the best choice. Explore your options with Jostock for expert guidance and tailored solutions.

FAQs: Lifetime Trust vs Living Trust