The Bogleheads' Guide to Investing

The assets in a living or revocable trust avoid probate in your state of residence and also in other states where you might own property, if the out-of-state property is placed in the trust. After your death, the trust is similar to a will in some ways, in that the successor trustee will distribute the assets according to your wishes. However, since the trust assets don’t go through probate, your affairs are kept private. With a trust, there is a much smoother transition after your death, and the disposition of assets can start immediately. However, trusts are more costly to create than wills, so you need to be sure a trust is warranted in your situation. If you do decide to create a living trust, you’ll need to retitle and transfer your assets into the trust. You can name yourself as the trustee while you’re alive, which means that you’ll still retain full control over the trust’s assets, just as you did when you owned them outside the trust. If you want, you can also name your spouse as a cotrustee, in which case you’d both retain control over the trust’s assets. You’d also want to name a successor trustee. The person you select (spouse, child, good friend) should be someone you trust and who you have complete confidence in to carry out your expressed wishes in an honest and efficient manner in the role of successor trustee. The successor trustee would also manage the trust assets if you should become mentally incompetent.