Living Trust
BY DAVID W. MYERS, (c)2003 Cowles Syndicate Inc.

A living trust is easy to create and can provide homeowners with several benefits that wills do not offer.   First, assets in a trust do not have to go through costly and time-consuming probate proceedings after you die. And second, a trust allows you to select a person who can step in and run your financial affairs in case you become physically or mentally incapable of managing them yourself.

Doesn't a trust serve the same purpose as a written will?
A will's sole purpose is to provide details about the way you want your assets distributed after you die. A trust performs the same function, but also does a lot more. For many people, the most important benefit is that a trust -- unlike a will -- is not subject to probate proceedings.

Why should I want my estate to avoid probate?
Because even the simplest probate proceedings can take more than a year to complete, with attorneys and others running up huge charges every step of the way.

If I create a trust now to avoid probate later, will I lose control over the property I put into it?
No. You control the trust and its property for as long as you are alive and capable of making decisions for yourself. Creating a trust will not affect your day-to-day use of the home or other property that you put into it. You can also sell or refinance your home and other trust assets just as easily as you could before the trust was formed.

Can married couples create a living trust?
Trusts can be created by married and single people alike.

Does creating a trust involve lots of paperwork?
No. A trust is created by preparing a simple "Declaration of Trust" and completing a handful of related documents. You don't have to file a separate tax return with the Internal Revenue Service, and all of the tax benefits you currently enjoy will remain intact -- including the ability to keep up to $500,000 of your home's resale profits tax-free if you're married or $250,000 if you're single.

What are some of the other benefits of creating a trust?
Because trusts don't have to go to probate court, their contents stay out of the public record. That's an important consideration if you don't want the world to know what you left behind, and to whom you left it.   Trusts are also easy to change.