Living Trusts as defined by the Internal Revenue Service reads; "In general, a trust is a relationship in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another."
In simple terms this really means that if you have certainty of confidence in a person, an understanding can be made to allow this person of trust to manage and maintain your property during your lifetime. Upon your death this person has instructions on how to distribute your property.
The main advantage of using a "Living Trust" is to avoid the probate process upon your death. Probate is a process in which the courts oversees distribution and transfer of your property to your heirs. This can be very expensive and excessively time consuming.
The legal entity that is created is sometimes referred to as a "Revocable Trust" or "Revocable Living Trust"revocable. This entity is made up of 3 parts. First you have the person or party that creates the arrangement. This person is referred to as the "Settlor" or sometimes called Grantor or Trustor. The Settlor can be more than one person, such as a husband and wife. The second part of this trust is the "Trustee". The Trustee is the one that holds title and maintains all of the property. It is common when a husband and wife form a family trust to name themselves as the trustee. The last part of the trust is the "Beneficiary". This is the person or entity that will receive the property contained within the trust.
The terms "Revocable" "Irrevocable" are associated with Living Trusts. Revocable means that the trust can be dismissed, withdrawn or revoked at any time. This allows for complete control of property within the trust to be removed added to or modified. However, upon the death of the Settlor, nothing can be altered or changed. At this point the trust becomes "Irrevocable" and controls the distribution of its included properties.