A living trust is a type of trust that a person sets up during their lifetime. When a person sets up such a trust, they put a number of assets into it, which will then be managed by a trustee.
These arrangements are relevant to the insurance industry, since many people put life insurance policies into living trusts.
When a person sets up a living trust, the goal is often to have assets pass on to beneficiaries in a way that is more favorable (in terms of taxation or other regulations) than they might be through another inheritance process.
Assets in a living trust do not need to go through a probate process. This means that putting assets into a living trust can save a lot of time and money, which can be very worthwhile since life insurance policies are often worth large sums of money.
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