Living Trust
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 the trustee in action.
- You avoid probate and court costs
- You will probably 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 is initial cost and energy in setting up the trust
- You lose all control over the property with most irrevocable trusts.
- It requries 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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Department of Economic Development Neighborhood Assistance Program (NAP)
Recycling
Program