Revocable Living Trust

Advantages

• You see your trust work.
• If you are not your own trustee, you observe the trustee in action.
• 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 beside yourself is trustee.
• At time of termination, there may be fees.
• There are no immediate tax advantages.

Irrevocable Living Trust

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 at charity on 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 is initial cost 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.