What is the difference between a Living Trust and a Bypass Trust?
A. A Living Trust is a revocable trust created while a person is alive, whereas a Bypass Trust is typically an irrevocable trust created at death. A Bypass Trust can be created by a Living Trust or by a Will. (Yes, a Living Trust can create a Bypass Trust, but a Bypass Trust would never create a Living Trust.) A Living Trust is simply an ownership arrangement where property is held in the name of a “trustee” rather than in the name of the person who really owns the property. People almost always create Living Trusts for their own benefit, with the goals of avoiding probate, addressing the possibility of future incapacity, and keeping matters private. Normally, the person who creates a Living Trust names himself or herself as trustee and as beneficiary. Upon that person’s death, all or a portion of the property which remains in the Living Trust passes according to the terms specified in the trust agreement. Bypass Trusts are most often created when a husband or wife dies in order to sav
