What Is a Living Trust in Real Estate?

A living trust is a legal arrangement in which a trustee holds and manages real estate for your benefit during your lifetime and later for your beneficiaries after death. Living trusts are widely used in estate planning because they help avoid probate, simplify inheritance, and maintain privacy.

Living Trust: Simple Definition

A living trust is a revocable estate planning document that allows a property owner to transfer real estate into a trust while keeping full control during their lifetime. After death, the successor trustee distributes the property according to the trust’s instructions—without going through probate.

Why Property Owners Use Living Trusts

Living trusts are commonly used to:

  • Avoid probate for homes and investment properties.
  • Maintain privacy, since trusts are not public record—unlike trustees' deeds recorded after transfers.
  • Provide smooth transfer of property to beneficiaries.
  • Prepare for incapacity by appointing a successor trustee.
  • Manage multiple real estate assets through a single trust structure.

How a Living Trust Works with Real Estate

To place real estate into a living trust, the owner must formally transfer title to the trust. This usually involves:

  • Creating a revocable living trust document
  • Executing a new deed transferring the property into the trust (often a grant deed)
  • Recording the deed with the county
  • Listing the trustee as the legal titleholder
  • Maintaining the ability to amend or revoke the trust at any time

The successor trustee can later sell or distribute the property without court oversight, unlike when property passes through intestate succession or probate.

Do Living Trusts Avoid Probate?

Yes — real estate titled in a living trust avoids probate entirely.

This prevents delays and reduces costs typically associated with probate sales.

However, real estate not placed in the trust may still go through probate unless a pour-over will is used to transfer leftover assets.

Living Trust vs. Other Estate Planning Tools

Living trusts differ from other inheritance tools:

  • Living Trust: Avoids probate and allows lifetime control.
  • Will: Must go through probate and becomes public record.
  • Pour-Over Will: Transfers remaining assets into the trust.
  • Testamentary Trust: Created within a will and begins after death.
  • Joint Tenancy: Transfers ownership automatically through survivorship rights.

Living trusts work especially well when paired with a pour-over will.

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