The person is still alive and the asset is under the person’s name when setting up Living Trust. During the person’s lifetime, he/she needs to transfer the assets that he/she own to the Trustee name. Setting up Living Trust will provide you with asset protection against negligence claims, creditors and bankruptcy.
As for corporate entities, you probably realize that operating and owning a business can be fraught with pitfalls and risks. Turning a profit isn't enough; you must also protect your business from claims and lawsuits. Debts and mortgage obligations to third parties and vendors, claims for damages caused by your employees, product or professional liability, and consumer-protection issues are just some of the risks you must deal with. A Corporate Trust prevent such unwanted events. Even if you do not think you may need protection from creditors, circumstances could change, so it is always a good idea to set up protection for your business and personal assets before or at the time you set up a business.
A Testamentary Trust is specified in the language of a Last Will and Testament and goes into effect upon an individual's death. This type of trust is typically used when someone would like to leave assets to a beneficiary, but doesn't want the beneficiary to receive those assets until a specified time. An example might be if there are minor children who are the beneficiaries of an estate and the parent(s) prefer the child(ren) does not receive the asset outright. The parent can specify the assets are used for the child(ren)'s care until they reach a particular age, or even stagger the balance to the child(ren) upon certain age milestones. Another example may be if a child has a disability or poor spending habits and the parent chooses to safeguard the inheritance by creating a Testamentary Trust.
A revocable trust can be changed or terminated by the trustor during his lifetime. An irrevocable trust, as the name implies, is one the trustor cannot change once it's established, or one that becomes irrevocable upon his death.
Living trusts can be revocable or irrevocable. Testamentary trusts can only be irrevocable. An irrevocable trust is usually more desirable. The fact that it is unalterable, containing assets that have been permanently moved out of the trustor's possession, is what allows estate taxes to be minimized or avoided altogether.
A charitable trust is an irrevocable trust established for charitable purposes and, in some jurisdictions, a more specific term than "charitable organization". A charitable trust enjoys a varying degree of tax benefits in most countries. It also generates good will.