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The answer is simple probably not. Although a living trust does carry with it some advantages, the benefits typically only outweigh the costs in the case of large estates. Unless privacy concerning an estate's assets and beneficiaries is the priority (probate court records are public), for most people a living trust will prove to be unnecessarily expensive and time consuming.

Here are a few points about living trusts to consider:

Living trusts do not avoid taxes.
The assets of a living trust are still included in the estate of the deceased and,therefore, are still subject to estate taxes. There are several measures that can be incorporated into a trust that can reduce the taxes paid by the deceased's heirs, however, these can just as easily be included in a will.

Living trusts do allow an estate to avoid being tied up probate court.
If the living trust is properly set-up and maintained, then the estate will not be subject to probate laws. Be aware that any assets acquired after the trust was created and that were not properly added to the trust will be subject to probate. Also, there are certain assets that are exempt from probate, such as those with named beneficiaries (IRA's, 401(k)'s, life insurance policies, etc.) and property jointly owned with the right of survivorship.

One note about probate; full court proceedings are not always necessary. If the value of the estate is less than a certain amount (as determined by state law) then probate can often be handled through the court clerk or even, sometimes, by mail.

Living trusts can be expensive and the trust must be maintained through the course of a lifetime.
The legal expenses incurred in the creation of a living trust often exceed the cost of setting up a will. In addition, where as probate is a one-time-only expense incurred by a person's heirs, there are often ongoing expenses associated with the maintaining and administering of a living trust. Such costs may include trustee fees if an independent trustee (such as a bank) is named in the trust. There can also be additional legal expenses incurred should the trust need to be amended to include property or assets added to an estate after the trust's creation.

Living trusts do not eliminate the need for a will.
A properly drafted and valid will is always the best foundation to sound estate planning. Certain issues, such as the guardianship of minor children, are not covered by living trusts. Not only does a will handle issues that fall outside the realm of a living trust, it can also serve as a "catch-all" for any property or assets that were not properly added to the trust.

Learn more about this author, Charles Corthell.
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