A revocable living trust is a popular estate planning tool that you can use to determine who will get your property when you die. Most living trusts are "revocable" because you can change them as your circumstances or wishes change. Revocable living trusts are "living" because you make them during your lifetime. Lawyers sometimes call this "inter vivos."
Most people use living trusts to avoid probate. Probate is the court-supervised process of wrapping up a person's estate. Probate can be expensive, time consuming, and is often more of a burden than a help. Property left through a living trust can pass to beneficiaries without probate.
Learn more about probate in Nolo's Probate FAQ.
While saving your loved ones from the hassle and expense of the probate process is the greatest advantage of a living trust, there are a few other benefits:
For a more thorough discussion of these benefits, see Other Advantages of a Living Trust.
The main disadvantages of a living trust are:
Many people use lawyers to create a living trust, and lawyers' fees can be high. (But you can also make a simple living trust yourself, using WillMaker & Trust.) In addition, you'll need to take the time to make sure that your property is held by the trust. If you acquire property at a later date, you'll need to make sure it is transferred to your trust, or that you take title to the property as trustee of the trust, rather than as an individual.
A living trust document is a written document, signed by the trust maker and a notary public. The document must list the property in the trust, name a trustee, and name who gets the property when the trust maker dies.
The trustee is the person who will take care of the property. While the trust maker is alive, the trustee is usually the trust maker and then a successor trustee takes over after the trust maker's death.
After the trust document is made, the trust maker must transfer any property he or she wants covered by the trust into the trust. For many items, this requires simply including a list of property with the trust document. However, titled property (like real estate) must be retitled in the name of the trust. This is usually not complicated or difficult, but it must be done correctly or the titled property could end up in probate.
You can create a living trust, quickly and easily, with Nolo's WillMaker & Trust software.
Here's a comparison of what living trusts and accomplish, compared to wills. Some estate planning goals can be accomplished by both living trusts and wills, while others will require you to use either a trust or a will.
With both wills and revocable living trusts you can:
With a trust, not a will, you can:
With a will, not a trust, you can:
For a thorough comparison of wills and living trusts, and a handy chart, see Living Trust vs. Will.
Many different types of trusts, with different purposes, exist. To learn more about irrevocable trusts, which can be used for goals such as avoiding estate taxes or providing for someone with special needs, see Irrevocable Living Trusts.
You do not have to be a lawyer to make a living trust. If you have a fairly straightforward situation and you are willing to do the work, you can make your own revocable living trust. However, some situations warrant seeing a lawyer for help.
Learn more about making your own living trust in Making a Living Trust: Can You Do It Yourself?.
Learn more in the Living Trusts section of Nolo.com.