Upon your death the living trust contains instructions for the distribution of your assets, just as a will would. The primary difference between a living trust and a will is that assets held in trust do not have to go through the probate process. When you set up a living trust, you transfer your assets to the trust, and the trust is considered the owner of your assets. When you die, there is no probate because the trust is considered the owner of the assets and not you. The assets are then distributed according to the instructions in the trust.
Probate is a legal process for managing estates of decedents and disabled persons.
A court appoints and supervises a responsible individual or trust company who administers and distributes assets. Probate has the advantage of involving a judge to help sort out disputes and supervise unsophisticated executors. It also has standard procedures for the orderly payment of claims and distribution of assets. Because a court is involved, probate can be somewhat cumbersome, with the need for preparation of special court documents and attorney appearances in court. With the sophisticated trustee or when all the beneficiaries are in agreement, avoiding probate may be desirable.