Pros and Cons of a Living Trust

Pros

A living trust can help your estate avoid probate. This is a big advantage especially if your estate is large. Unlike a normal will, a living trust does not have to be probated. Upon your death, the assets in the living trust are held or transferred by your trustee according to the terms of the trust.

A living trust can keep your affairs private. When a will is probated it becomes part of the public record. Anyone can read it. Living trusts generally remain private ensuring the privacy of the living trust and lessens the likelihood of litigation.

A living trust offers flexibility. You can easily change a living trust during your life as circumstances warrant. Changing a will requires more formality and following certain procedures to make a change.

A living trust can be used to avoid guardianship proceedings. If you become disabled, your trustee can manage your assets and financial affairs for you while you are disabled. Without a living trust, your loved ones would have to initiate guardianship proceedings in court and get a judge to give them the ability to act for you.

Cons

A living trust is useless unless your assets are formally transferred to the trust. So, all the advantages above disappear if you have not funded the trust. Getting your assets transferred to the living trust takes time and usually there is at least some expense.

In addition to the costs of funding the living trust, there is also the initial cost to have an attorney prepare it. Generally it will cost more to have an attorney prepare a living trust than it would to have the attorney prepare a simple will.

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