The life tenant of a life interest trust (also known as an interest in possession trust) is entitled to all income arising and/or is entitled to live in and enjoy any property owned by the trust. A living trust is a legally binding agreement between the person who creates the trust, the Grantor, and an individual or entity known as the Trustee. After the trust is created, the Grantor must transfer his or her assets into the trust. Almost any asset can be transferred into a living trust, including a bank account. But, to do so, the Grantor must re-title ownership of that.
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Many people use a revocable living trust because it gives them more control over the trust assets. Putting your house in a revocable trust still allows you to change the terms of the trust or remove the house from the trust if you want to. Taxes and personal finances are generally easier to manage with a revocable trust.
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