A Trust is a fiduciary relationship with respect to property in which one person is the holder of the legal title to property, subject to an equitable title in another.
“I own Black Acre. I give it to you or even myself, as Trustee, to do with as I direct; and when I die, I give it to my son in Encino, and if he does not survive me, then to his children in equal shares.”
You may be your own Trustee, but you should name a Successor Trustee to act upon your death or if you are incapacitated; and that Successor will manage and distribute the assets in your Trust. You may give the Trustee specific instructions about how you want to manage the Trust or allow the Trustee to have broad discretion; and you may put any of your assets into the Trust, or you may put some of them into the Trust and not others. You can also retain almost complete control over your assets. You may make the Trust revocable, so that you can change it, or cancel it, at any time during your lifetime. You can always change that Trustee during your lifetime, but remember that the Trust is only a piece of paper. It is only as good as that which you put into it. If you transfer nothing into the Trust, it is simply a shell and has no force and effect. It is then important that you arrange for the transfer of assets into a Trust and that is not an easy simple matter.
Pros and Cons of a Trust:
When you sign a Trust Agreement, you are turning over legal title, or ownership, of the funds, stocks or other property to this other person or institution. You, as the person who sets up the Trust, are “the Trustor” or “the Settlor”. The person or institution that holds title to your Trust is “the Trustee”. You may be your own “Trustee”, but you must make arrangements for a Successor when you can no longer be the Trustee. You, as Trustor, instruct the Trustee what he or she may or may not do with those funds or property. For instance, the Trustee cannot use the property for his own benefit.
You should also know the negatives of creating a Trust. It is a bit cumbersome. You should hire an attorney to do it properly. The transfer of the assets to the Trust must carefully be attended to; and the Trust is its own tax-paying entity, so there are some minor accounting procedures that have to take place. A major advantage; however, is the Probate avoidance scheme and that may be worth considering a Trust in itself.
Should you have a Trust, and if so, what kind of Trust?
The answer to that depends on what you want Estate Planning to do for you. There are many kinds of Trusts, but they are either “Living Trusts” or “Testamentary” Trusts. A “Living Trust”, also known as an “Intervivos Trust” operates during your lifetime. One of the reasons for this may be because you want to travel and you want a professional to manage your investments if you don’t have the time or expertise to do so. It could be because you are senile or disabled and you need some help in that direction. A “Living Trust” also lets you make your own decisions about the kind of “old age care” that you want. If you don’t make such arrangements, then a court may have to decide what kind of care you will have and who will manage your assets.
Needless to say, once you have transferred your assets to a Trust and instructed the Trustee how to disburse them after your death, there is no longer a need for a Probate. A good professional; however, will suggest that you have what we call a “Pour Over Will”. That is utilized because people often forget to transfer assets into the Trust.
A “Living Trust” can also be part of your overall Estate Plan and, of course, it is confidential. Only you, your Trustees, your lawyer and the Beneficiaries know the amount your Trust is worth and how the income is used and the names of the Beneficiaries. The important thing is that it allows you to avoid a Probate, which is a public proceeding.
By Creating a Trust:
A. You save the cost of Probate fees to the attorney and the Executor.
B. You maintain privacy. Keep in mind that Probate files are public record that your neighbors can look up.
C. You save the delay in probating an Estate, which takes a minimum of six months and often times a year or more if there are any unanticipated problems and, sometimes it takes even longer.
In conclusion, should you have a Small Estate and wish everything to go to your surviving spouse, avoiding Probate by use of a commonly-used revocable living trust may be a wise choice. In light of changes to the Federal Estate Tax laws in the next several years, if your Estate is valued at $2,000,000.00 or over, you would be advised to combine a standard revocable living trust with other estate tax saving devices such as an irrevocable life insurance trust, a charitable trust or a family limited partnership to reduce estate taxes.

Both a Will and a Living Trust allow you to set the terms for the distribution of property after death. The differences between the two, however, can be quite significant and you should consider the following advantages and disadvantages:
Living Trust
* A living trust is a cost-saving device: it allows one to avoid the expense and delay of probate proceedings, which can take up to three years to complete and can consume up to 10% of the value of your clients’ estate.
* If you own property in another state, a living trust eliminates the need to probate that property in that state.
* A living trust can immediately transfer management of your property if you become incapacitated, either physically or mentally. There is no need for you to go to court in order to appoint a guardian or conservator.
* A living trust protects your privacy; it remains confidential and does not become a matter of public record.
* You can name a trusted person to manage trust property for young beneficiaries.
* When the time comes to distribute your assets, there will often be no need for the family to hire a legal professional to distribute the assets held in the trust.
* Setting up a trust requires quite a bit of initial paperwork and can be expensive.
* Setting up a trust also requires you to transfer ownership of all the property intended to be placed in the trust. In the case of real estate, this will require quitclaim deeds.
* You may run into some difficulty in the event you wish to refinance property held by the living trust.
* You cannot designate a guardian for any minor children in a living trust (but this may be done easily in a will that supplements the trust).
* Setting up a will is more simple and less expensive than setting up a living trust.
* Creditors face a final cut-off date for bringing claims against your estate.
* You may name a guardian for minor children in a will.
* You need not transfer your property to another entity in order to create a valid will.
* Upon probate, a will becomes a matter of public record.
* While you may appoint whomever you wish to act as executor of your will, it is usually the probate lawyers who control the actual distribution of property. This can be expensive.
* Probate, which is necessary for the implementation of your will can be both costly and time-consuming.
* A will does not provide for the transfer of management of your assets or property if you should become physically or mentally incapacitated.
Most living trusts include a Pour-Over Will which is a document designed to distribute any property that is not included in the trust. In addition, it allows you to name a guardian for any minor children.