Are there advantages in having a trust over a will?
Terry Says: The advantage is in having a REVOCABLE LIVING TRUST. This is a trust you create while you are alive, to hold title to your assets. You can buy and sell any asset — including the family home – -in the name of your RLT. The advantage is that if the property — whether real estate, investments, or any other asset — is titled in the name of your trust, it does not go through the process of probate at your death. Probate is costly and time consuming — and basically is designed to change title to property through the court system. But if your property is already named in the RLT, then it goes directly to the named beneficiary inside the trust.
Now, you might think that it would be just as easy to title your property in joint tenancy. But the RLT has one other advantage: If you are incapacitated (stroke, Alzheimers?), then the person you have named as successor trustee can take over handling your property — without the intervention of the court, declaring you incompetent, etc.
If you do create a RLT, be sure to legally rename the property in the name of the trust. That will not involve any tax consequences at the time of the renaming –and in the future any sales gains or losses on property in the name of the trust will be reported on your own tax return.