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A loving trust is a type of legal document that designates a person or entity to control and manage one’s assets. The person who creates the trust is called the grantor, and the people who stand to benefit from it are typically referred to as beneficiaries. All of the assets that are named in a loving trust are transferred to the trust so that the grantor no longer officially owns the assets he is including. A loving trust isn’t unique when it comes to estate planning; it is really just another name for a living trust.
When a person creates a loving trust, he is referred to as the grantor. He creates this legal document to arrange for the control and management of the assets he chooses to include in the trust. The grantor of a loving trust appoints a trustee, or makes himself the trustee, to manage and control his assets for the benefit of those he lists as his beneficiaries. When the grantor of the trust is alive, the trust is revocable, which means he can cancel it or amend it at will. When he dies, however, the trust becomes irrevocable and is used for the final distribution of the grantor's assets.
It is important to note that the name "loving trust" doesn’t really have much significance. A company that sold living trusts in the 1980s initiated the term "loving trust" to use instead of "living trust." The loving trust does not, however, differ from a living trust.
A person may create a living trust so that his beneficiaries may benefit from his assets while the trustee has control and management of them. In many cases, this legal document is used as a way to avoid probate. Once the grantor dies, the assets are transferred to the beneficiaries named in the trust. In many cases the distribution of the assets is much quicker than it would be with a will. Likewise, a living trust allows the beneficiaries to avoid the costs of probate; this type of trust may even allow for the deferral or avoidance of estate taxes.
Some people also appreciate the privacy this type of trust affords them. Wills become public record, which may prove uncomfortable for some grantors and their beneficiaries. Loving trusts, on the other hand, do not become a part of the public record.