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Like wills, living trusts (formally known as revocable trusts) list the people who will receive your property after you die, leaving you free to manage it while you're alive. Unlike wills, trusts require that you give up direct ownership of that property.
A living trust is a legal arrangement that you can use to help transfer property to loved ones and protect assets in case of incapacity. Learn more here.
Are Living Trusts Worth It? Pros and Cons. Living trusts can help manage your assets (and taxes) while you're alive and transfer them after you die, but they have disadvantages, as...
Living trusts are private and only parties relevant to the trust, such as beneficiaries and trustees, can view it. Irrevocable living trusts provide tax benefits to grantors. Grantors are responsible for capital gains tax for assets held in revocable living trusts.
Living trusts aren't for everyone, but they can be a perfect estate-planning tool for some, depending on their concerns and their circumstances.
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: better protection from court challenges. For a more thorough discussion of these benefits, see Other Advantages of a Living Trust. The main disadvantages of a living trust are:
A revocable living trust can help you protect privacy, avoid probate and minimize estate taxes. But you will also have some limitations.