Living trust

What does "Living trust" mean in real estate?

A living trust—in real estate most commonly a revocable living trust—is a legal arrangement you create during your lifetime to hold ownership of assets (including homes) and to manage or distribute them according to your instructions while you’re alive and after you die. The person who creates the trust is the grantor (also called settlor or trustor). The grantor names a trustee (often themselves) to manage trust property and designates beneficiaries who receive assets when the grantor dies or under conditions set in the trust document.

Key features of a living trust in real estate

• Control: As grantor and trustee you retain day-to-day control—selling, refinancing, renting, or living in the property—while it is titled in the trust’s name.
• Revocability & flexibility: A revocable living trust can be changed or revoked anytime you are mentally competent.
• Successor trustee: You name a successor trustee to step in if you become incapacitated or die, allowing continuity of management without court intervention. (successor trustee)
• Probate avoidance & privacy: Real estate titled to the trust typically bypasses probate, avoiding the public, often lengthy court process and keeping transfers private. (probate)
• Ongoing maintenance: The trust must be funded—real estate and other assets must be retitled into the trust. Assets left outside the trust may still require probate.

How living trusts are used with real estate (real-world examples)

Example 1 — Buying for privacy and ease: James and Elaine set up a revocable living trust and title their new home to it. As co-trustees they keep full control. If both become incapacitated, their named successor trustee manages the property; when they die the home transfers to their children privately and without probate.

Example 2 — Updating as assets change: Gary retitles his Los Angeles home into a living trust and lists his children as beneficiaries. He can add or remove properties from the trust’s schedule over time; upon his death the house passes to his heirs outside probate.

Example 3 — Incapacity planning: A retiree places a vacation home in a revocable trust and names her brother as successor trustee. After a stroke, her brother manages or sells the property to cover care costs—no court-appointed conservatorship required—and the property later passes to beneficiaries per the trust.

Why a living trust matters for regular homebuyers

• Avoids probate: The main advantage is a private, typically faster transfer of real estate to heirs without court involvement.
• Maintains control: You keep full control as trustee and can act with the same authority you had before funding the trust.
• Handles incapacity: A successor trustee can manage your property if you become unable to do so, avoiding conservatorship.
• Flexible estate planning: You can add new purchases (if retitled into the trust) and adjust beneficiaries or terms as life changes.

Practical steps for homebuyers who want a living trust

1. Consult an estate attorney to draft a properly worded trust document.
2. Retitle your home (new deed) and other assets in the trust’s name to fund the trust.
3. Name yourself (and spouse if applicable) as trustee and select a reliable successor trustee.
4. Update the trust after major events—buying or selling property, refinancing, births, deaths, or divorces.
5. Consider a pour-over will to catch any assets accidentally left out of the trust at death.

Quick comparison: Living trust vs. typical will (real estate)

Bottom line

A living trust is a practical, flexible estate-planning tool for homeowners who want to keep control of their real estate during life, ensure smooth management if they become incapacitated, and provide a private, efficient way to transfer property to heirs after death. It requires initial legal setup and active funding (retitling assets), but for many homebuyers the privacy, probate avoidance, and continuity benefits make it worth the investment.