Quora Answer: What is the Point of a Living Trust?

The following is my answer to a Quora question: “What is the point of a living trust?”

A living trust, or revocable trust, functions like a living will, except that it is far more dynamic.  It allows you to put your estate in a trust, and yet benefit from it since you have a direct say on how your assets are managed, and disposed off while you live.

A revocable trust has some benefits with regards tax mitigation, but not to the extent of an irrevocable trust, since the trust is not wholly a distinct legal entity. In places where there is no estate tax, its benefits are limited.  However, it is a useful vehicle for high net worth Muslims to bypass the fara’idh laws which stipulate furudh, heirs, and their shares.

A trust bypasses the probate process, which significantly reduces the time your heirs get their share of your estate upon your death.  Obviously, it also does not incur the cost of the probate process, which may be lengthy.  Also, we must remember that in many places, wills are public documents filed with a registrar of wills.  A trust document is a private document, and is not available to the public.  It is useful for people who would like to keep their assets private.