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Living Trusts
Advantages and Disadvantages

Revocable Living Trusts

Advantages

You see your trust work.
You avoid probate and the trust can be used to avoid ancillary probate - that is probate of property in another state.
You avoid the attendant publicity of probate.
You will probably save your estate a substantial amount of fees and costs.
You can provide for uninterrupted management in case of incapacity.
You can avoid interruption of management at death.
It's a good way to pass property to charity and save taxes at death.
You can change your mind.

Disadvantages

Initial cost and trouble of setup. Property must be transferred to the trust.
It slightly complicates subsequent dealings with the property.
It may require payment of an annual trustee's fee if someone besides yourself is trustee.
At time of termination, there may be fees.
There are no immediate tax advantages.

Irrevocable Living Trusts

Advantages

You see your trust work.
You observe your trustee in action.
You avoid probate and court costs.
You probably will save some fees.
It is a good way to pass property to charity.
You save any taxes there may be on the property going to charity upon your death.
With irrevocable charitable remainder trusts created while you are living, you can get an income tax deduction during your life.
You may save taxes on capital gains on property placed in a charitable remainder trust.

Disadvantages

Property must be transferred, so there are initial costs and energy in setting up the trust.
You lose all control over the property with most irrevocable trusts.
It requires annual fiduciary accounting and possible tax returns.
It may require payment of annual trustee fees.
There may be fees at the time of trust termination.
You can't change your mind and get the property back.

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