Your lawyer should evaluate your particular situation to determine if a living trust is right for you.  Be careful if the lawyer you consult never uses living trusts or always uses living trusts -- rarely is "one size fits all" good legal advice.  Here are some factors which often make using a living trust a good idea:

        * Real estate in another state -- If you are a Texas resident and own real estate in a state other than Texas, the proper use of a living trust could save you the cost of a probate proceeding in the other state.

        * Impending disability is likely -- If your age or medical condition is such that you have a reasonable fear that you will soon be unable to manage your own property prior to your death, then a well-drafted living trust could make it easier for the people you pick to manage your property.

        * Heightened privacy concerns -- Virtually everyone wishes to keep their personal financial affairs private, but if you have a greater than average desire for privacy, then a living trust may be a good idea.  If used properly, there can be less public disclosure of what you own if you become disabled or die.  Be careful that marketers of living trusts don't use this improperly as a fear factor to motivate you to buy their product, however.

        * Post-retirement, stable assets -- If you are retired and are not in "acquisition mode" -- in other words, if you are not buying new cars every couple of years, opening and closing accounts frequently, changing jobs, starting new businesses, etc. -- then a living trust may make sense.  For the rest of us, properly operating a funded living trust is usually too much of a hassle -- especially if probate avoidance is the primary goal.

        * Will contest likely -- If your loved ones are likely to fight over your will, then in some cases (with expert advice and attention) a living trust may make it less likely that someone will successfully contest your plan based on undue influence, lack of capacity, etc.

If most or all of these factors are not present in your situation -- and they aren't for the vast majority of people, then a traditional will-based plan is probably the simplest and cheapest way to plan.  Remember, though, that these are just general guidelines -- your lawyer will discuss your particular situation with you and help you determine what is best for you.

Last updated on January 6, 2011 by Glenn Karisch