A Living Trust is often used as a Will-Substitute as it allows you to control your assets while you are alive, and then leave them to your beneficiaries upon your death without court action (probate.) Because property owned by your trust avoids probate, it can also be used to avoid probate in other states in which you own real estate. A Living trust can also make things easier for your family in the event you are unable to manage your financial affairs due to, for example, an accident or Alzheimer/Dementia. There are many other advantages to using a Living Trust. For instance, a Living Trust is often more difficult to challenge by disgruntled relatives and creditors.
A trust is its own legal entity. It can be thought of as a private little company in which the creator(s) (grantor(s)) acts as the president, chairman of the board, sole shareholder and sole employee.
There are two basic steps in establishing a revocable living trust. The first is to have an attorney draft trust documents. After signing the trust into effect, it becomes necessary to transfer all or most assets into the trust (funding the trust). Since the trust owns all of the creator’s assets, upon his/her death, there would be no assets subject to probate. The trust would then have specific assets for how to manage and distribute the assets in the event of the creator’s disability or death.
A trust is generally a private document. No notice is required to be sent to disinherited heirs. No inventory, not even a copy of the trust, is required to be filed with any court or elsewhere. Trusts are generally far more difficult to challenge.
This information is a general outline in the differences of creation/administration for a trust and a will and is not meant to replace competent legal advice. There are more nuances and considerations for every individual scenario than could be addressed here.