Creation

• A living trust is created when a person, known as the trustor, grantor or settlor, wants to create a separate legal entity to have ownership over the grantor's assets. A living trust must be made in writing and must comply with state laws about its creation, similar to the requirements for creating a last will and testament. The grantor must properly transfer property into the trust, known as funding, or risk the property being subject to the probate process.
  
  

Trustees

• A living trust transfers ownership of your assets from you to the trust, a separate legal entity. The person responsible for managing the trust property is known as the trustee. Typically, the person creating the living trust names himself as the trustee. However, if that person becomes sick or otherwise incapacitated, a successor trustee must take over managing the trust assets, according to the California Bar Association.
  
  

Revocation

• A living trust can only be created and take effect during the grantor's lifetime. Once created, the grantor has the right to change the terms and conditions of the trust, or to revoke it completely. Also, living trusts name beneficiaries that stand to receive the trust property upon the grantor's death, similar to a last will and testament. Like a will, the grantor can change the beneficiaries of the living will as long as the grantor remains competent to do so.
  
  

Incapacity

• Living trusts can be used when a person faces incapacity and wants to ensure her assets are properly looked after on her behalf. If a grantor places assets in a living trust and then becomes incapacitated, the successor trustee named in the trust manages the assets. However, if no living trust is created, those assets get managed by either the person's spouse, domestic partner, any named attorney-in-fact or a court appointed conservator who reports to the probate court, according to the California Bar Association.