Why Create a Living Trust?

There are two basic types of trusts:

• A REVOCABLE LIVING TRUST
• TESTAMENTARY TRUST

A Revocable Living Trust is created by you during your lifetime. You can modify or terminate it and you remain in complete control. A Testamentary Trust is created after your death. This is created by the instructions you left in your Last Will and Testament. The disadvantage of a Testamentary Trust is that you still have to go through Probate.

Creating a Revocable Living Trust is simple. It is created by the Trustor (maker) and is managed by the Trustee (manager). The Trustor and the Trustee can be the same person.

The Revocable Living Trust is designed to avoid Probate and a Conservatorship.
It has two purposes:

• Designation of the Successor Trustee. This person takes over management of the trust if the initial Trustee dies or if the initial Trustee becomes disabled.
• The beneficiary designation. You will be the beneficiary until your death. At your death, the person you specified becomes your next beneficiary.

Advantages of a Living Trust

• AVOIDANCE OF COURT INTERFERENCE
  If you become disabled, the Revocable Living Trust avoids having the court appoint a conservator to manage your affairs.
• COSTS
  It is less expensive for your heirs. The necessity of probating your estate is avoided.
• DELAY
  It eliminates lengthy delays associated with Probate.

Disdvantages of a Living Trust

• INITIAL COST
  Establishing a Living Trust will cost more than creating a Last Will and Testament.
• NUISANCE FACTOR
  A Revocable Living Trust requires that your assets be transferred to your Living Trust. You must maintain the trust, and transfer new assets to it.
• POSSIBLE MISMANAGEMENT
  Since the Court will not become involved, it is essential to select a trustworthy person to serve as Successor Trustee. Sometimes two individuals, a bank or other institutions are appointed when a trustworthy person is not available.