A living trust is created while a person is alive instead of after their death. Living trusts keep a person's business affairs private because they do not have to be filed with the probate court, and thus are not public record.

A document called the Declaration of Trust must be created when establishing a living trust. The person creating the trust designates himself as trustee and legally controls the property in the trust. Property is then transferred, for example, from Mr. Jones to “Mr. Jones as trustee” of the Mr. Jones Trust. When the trustee dies, the person named in the trust as the successor trustee transfers the ownership of the property to the trust's beneficiaries. Since Mr. Jones does not technically own the property, probate is not required.

There are certain cases where a living trust becomes public record. It becomes public record if the trust is contested and has to go through the court system. However, living trusts are difficult to contest if the trustee was not incapacitated mentally when the trust was created. A living trust also becomes public record if a trustee or beneficiary asks the court to get involved. The court might be asked to review the trustee's decisions or supervise the trustee in accounting or property management issues.

In addition to a living trust, attorneys and estate planners will sometimes suggest creating a pour-over will that instructs the executor to transfer property into the trust that did not get transferred before death. This pour-over will is required to go through probate and thus becomes public record. However, it will not include details or asset inventory of the living trust. Estate laws and probate proceedings are different in each state, so a competent estate planner or attorney should be consulted. For more information, the State Bar of California has a useful site on living trusts at http://www.calbar.ca.gov/state/calbar/calbar_generic.jsp?cid=10581&id=2212.