Why is it called a “Living” Trust?

There are two ways to think about the word “Living” in Living Trust:

First, the word “Living” means that a document is dynamic, not static.  It can be changed and adapted over time.  This is the case with a Living Trust, and is one of its primary benefits.  This is why Living Trusts are also known as Revocable Trusts, or Revocable Living Trusts.  A Living Trust can also be cancelled, or revoked, which is where the “Revocable” term comes from.  

But that’s a bit misleading, because more often than not, a Revocable Living Trust is only revoked in part, and then that revoked part is replaced with new language, so it’s effectively a change to the Trust, not a full cancellation (revocation) of the Trust. 


Why would you need to change your Trust?  

The Living Trust document can be changed by its creators (the Settlors, Grantors, or Trustors) as long as the creators still have the legal capacity to make those changes.  

As children get older, we also get to know them better.  Sometimes, planning that made sense for your kids when they were adolescents no longer makes sense once they become married, and maybe even have kids of their own. 

One of your kids may also have a change in their financial situation, and therefore have less need for support/inheritance when you’re gone.  That can go the other direction as well – a child can develop a medical condition (or a dependency) that means they will need continued support, especially after you’re gone.

Or, one of your kids may be in the midst of a divorce, lawsuit, or another circumstance that would jeopardize any assets left behind for them.

The laws governing Trusts and Estates could also change (and they have over time); a Living Trust has the ability to adapt to those changes, and that’s one of the most common reasons for changing/updating a Trust.

In any of the above scenarios, and countless others, it’s important that your Trust is able to adapt to the changed circumstances.  The fact that a Living Trust is a “Living” document is what allows it to adapt and evolve with you.  Importantly, when the creators are no longer around, or no longer have the ability to make changes (due to incapacity), their Living Trust typically becomes irrevocable, or unchangeable.  So in a sense, it’s no longer a Living document.

Another way to think about the word “Living” in Living Trust is that it refers to when the Trust is created.  A Living Trust is created during your life – this is called “inter vivos” – compared to other trusts, like Testamentary Trusts, that are created upon death.  

This is another benefit of Living Trusts: because it comes into existence during your lifetime, a Living Trust can serve as a vehicle between you and your children, and even the generations that follow.  A smartly designed Living Trust creates continuity, consistency, and clarity while you’re here, and when you’re gone.


What’s not a “Living” Trust?

Living Trusts vs. Family Trusts

Although clients sometimes refer to Living Trusts as Family Trusts, they are technically different.  But the concepts are related enough that I generally know what a client is referring to when they use the Family Trust term.


Living Trusts vs. Living Wills

In estate planning, we have Living Trusts, Wills, and for bonus points, Living Wills.  Confused yet?  Each serves a different purpose, and I’ll save the difference between Living Trusts and Wills for a separate post.  Regarding Living Wills, know that they have basically no relation to Living Trusts.  Living Wills address health care decisions and are closely tied to, if not integrated completely with, Powers of Attorney for Healthcare (Advance Healthcare Directives).  I’ll also save that discussion for another post, but for our purposes here, just know that Living Wills are not related to Living Trusts.


Living Trusts vs. Irrevocable Trusts

This is a better comparison: Living Trusts can be changed while Irrevocable Trusts cannot be changed.  Simple right?  Of course, lawyers can’t just leave it be: to add confusion, there are some practitioners who refer to certain Irrevocable Trusts as Irrevocable Living Trusts.  In that case, they are using the second definition of the term “Living”, meaning the Trust was created during the life of the creator, not that it’s changeable, or “Living” in that sense of the word.  But generally, a Living Trust refers to a Revocable Living Trust, and will be in contrast to an Irrevocable Trust.

Are we thoroughly confused yet?  Worry not.  One of the many jobs of your estate planning attorney is to explain all of the above and help you make the decision that’s right for you and your family.  We’re here to help when you’re ready.

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