I.  During Life  

A.  Provides Asset Management upon Disability   

Most Living Trusts provide for their creator(s) to be the initial Trustee(s).  If there are joint Trustees (co-Trustees), often one will continue to serve as sole Trustee if the other is no longer able to serve.  If the sole Trustee is no longer able to serve, a trusted relative, friend, or associate usually becomes the successor Trustee.  This succession of Trustees, in the case of a Trustor's onset of any disability, will likely avoid the necessity of the appointment of a Guardian of one's Estate, which might be necessary in the absence of a Living Trust.

This situation, however, is parallel to the situation in which a person, with or without a Living Trust, uses a Durable Power of Attorney for Assets (also known as a Financial Durable Power of Attorney) to provide asset management upon his/her disability.  Granted, third parties such as banks, brokers, and title companies are often more willing to transact with a Trustee of a Living Trust than with an Agent under a Durable Power of Attorney; yet asset management upon disability is available in the absence of a Living Trust through a Durable Power so long as it has been provided for before the onset of disability.  If no Durable Power has been created, or if created, no Agent is able and willing to serve, then the appointment of a Guardian of one's Estate may be necessary in the absence of a Living Trust.

Remember, too, that a Living Trust can only provide for financial or asset management, and not personal management and care.  If personal management and care are required, it may be available through a Durable Power of Attorney for Health Care so long as it has been provided for before the onset of disability; or, lacking that, through the appointment of a Guardian of one's Person.

B.  Allows Clearer Accounting & Avoids Commingling of Separate Property   

A Living Trust can consist of multiple independent trusts, each of which can be managed by a different Trustee for the benefit of different beneficiaries.  So, for example, a husband and wife (eg, "John and Mary") could create the John & Mary Trust, consisting of three independent Trusts during their joint lives:

• The John & Mary Community Trust, for their community property.  In this situation, many couples prefer to have both John and Mary serve as co-Trustees but with each having the power to bind the Trust alone, without the consent of the other.  As a consequence, for example, each would have his or her own checkbook for the Community Trust checking account, for which each could sign checks alone, without needing the other's signature.

• The John Separate Trust, for his separate property and with him being its Trustee. 

• The Mary Separate Trust, for her separate property and with her being its Trustee.

This example used a married couple, but a similar arrangement could be used equally well for non-married partners.

II.  At Death

A.  Results in a Quicker and Less Expensive Administration

California provides for:

1. A more formal probate process,

2. "Statutory" probate commissions and fees based on the value of the assets in your probate estate,

3. A Court filing fee also based on the value of the assets in your probate estate.

How much are you contemplating paying now to create a Living Trust?  $1,500?  $2,500?  More?  How much time and hassle are you willing to devote to its administration for the rest of your life?  Remember that for its use to actually result in "quicker and less expensive estate administration," it is largely an "all or nothing" deal for an event that may not come to fruition for many, many years.  In order to ensure the avoidance of a probate at death, all your assets must then be held by your Living Trust.  Meanwhile, you must be scrupulous in titling and administering your assets in the Trust.  And then, all it takes is one asset, and a probate may be necessary.

B.  Provides Increased Privacy for Your Estate Plan and Its Administration   

At first blush, a probate proceeding is public, and administering a Living Trust at death is private.  Consequently, what will become available to the public about your assets is the degree to which you describe them in the dispositive provisions of your Will.  For example, if your Will says only "I give my entire estate to my spouse if he/she survives me, and if he/she doesn't survive me, then to my children by right of representation," or "I give my entire estate to my Trustee," you have revealed nothing about either your assets or their worth.

If you are concerned about the disclosure of your personal information, your assets, and their value, much of that is already readily available to anyone who is serious about obtaining it:

• Birth certificate, marriage license, and other records via county records and licenses,

• Real property via county recordation of ownership,

• Real property indebtedness via county recordation of security interests,

• Vehicles via state registration,

• Business and assumed names, incorporations, limited partnership creations, etc. via state registration,

• Credit reports available to many (perhaps unethically) at a small price via credit bureaus,

• And so forth.

In summary, a probate proceeding may not be as revealing as you suspect, you are largely in control of any disclosure regarding assets in a probate proceeding, much personal and financial information about you is already available to anyone who is serious about finding it and willing to pay the price, and using a Living Trust may not provide the relative privacy that you may otherwise desire.

C.  Promotes Greater Security for Your Estate Plan 

There is more law on Will contests than Trust contests, Will contests are more popular than Trust contests, and the Courts are more familiar with Will contests than Trust contests.  Consequently, Will contests are more favored than Trust contests --- meaning that Will contests favor the contestant-Objectors, while Trust contests favor the defendant-Trustees.

Furthermore:

• Using a Will as your estate planning vehicle necessarily means that a probate proceeding will follow your death, and so the arena for having a Will contest will necessarily be created, and

• As a result of the Court's appointment of your Personal Representative, he/she is required by law to send notice of the appointment and the probate proceeding to all persons interested in your estate, and so it is almost as if they are formally invited to file a Will contest.

Both of these circumstances are absent upon the use of a Living Trust.

Will vs. Trust :: Benefit Comparison