Which type of trust is commonly used to manage the assets of a family during the lifetime of the trustor?

A living trust is designed to manage a person's assets during their lifetime and facilitate the distribution of those assets after death. This type of trust allows the trustor to retain control over their assets and make changes as desired while they are alive. It is often used to avoid probate, streamline the management of assets, and provide for ease of asset transfer upon death.

Living trusts can provide numerous benefits, such as maintaining privacy regarding asset distribution and offering flexibility in how assets are managed. Since the trustor can serve as the trustee during their life, they can actively manage their wealth and make decisions in real time. Upon the trustor's death, a successor trustee can step in to manage and distribute the trust assets according to the trustor's wishes laid out in the trust document.

In contrast, a testamentary trust is created through a will and only becomes effective after the trustor's death, which doesn't serve the purpose of managing assets during their lifetime. A charitable trust is established for philanthropic purposes, and a special needs trust is specifically designed to benefit individuals with disabilities while protecting their eligibility for government benefits. These trusts have unique purposes that do not align with the intention of managing family assets during the trustor’s lifetime, making a living trust the most appropriate choice