What is a living trust?

A living trust is the name for a trust that is created during your lifetime as contrasted with a testamentary trust which is a trust that is contained in your will. You can set up a living trust during your lifetime and be the initial trustee and beneficiary of the trust. In that situation you do not need to get a tax identification number for the trust, but rather can use your own social security number for the trust and you need not file separate tax returns for the trust, but can just declare the income on your own individual tax return, making the trust easy to administer. By placing assets into the name of your living trust during your lifetime, you can avoid having any of those assets be subject to probate at death.