Which arrangement is a trust that operates during the grantor's lifetime?

Which arrangement is a trust that operates during the grantor's lifetime?

• A. Charitable Trust
• B. Revocable Trust
• C. Living Trust
• D. Testamentary Trust

Answer: (C)

A trust that operates during the grantor’s lifetime is a living trust. It’s created and funded while the grantor is alive and can take effect immediately. Often it’s revocable, meaning the grantor can change or revoke the terms as life changes. This setup allows the grantor to manage assets during life and even plan for incapacity, and it can help avoid probate because assets are owned by the trust rather than by the person at death. By contrast, a testamentary trust only comes into effect after death, a charitable trust is designed for charitable purposes, and a revocable trust is a common form of a living trust.

A trust that operates during the grantor’s lifetime is a living trust. It’s created and funded while the grantor is alive and can take effect immediately. Often it’s revocable, meaning the grantor can change or revoke the terms as life changes. This setup allows the grantor to manage assets during life and even plan for incapacity, and it can help avoid probate because assets are owned by the trust rather than by the person at death. By contrast, a testamentary trust only comes into effect after death, a charitable trust is designed for charitable purposes, and a revocable trust is a common form of a living trust.