Do I need a living trust?

What a living trust actually is

A living trust is a legal arrangement you create while you are alive. You move assets, such as a home or accounts, into the trust, and you keep control of them for as long as you live. When you pass away, whatever is in the trust passes to the people you named, according to your instructions.

How it compares to a will

A will also directs where your things go, but a will generally goes through probate, the court process for settling an estate. Probate is public and can take time. Assets held in a properly set-up living trust can typically pass to your beneficiaries without going through that process, which is often why people set one up.

Things that make people lean toward one

None of these is a rule, just factors that commonly come up in the conversation.

• You value privacy and would rather your estate not become part of a public court record.
• You own property in more than one state.
• You want a smoother handoff if you ever become unable to manage your own affairs.
• You are providing for minor children or a dependent with special needs.

An important caveat

Estate laws vary meaningfully from state to state, and setting up a trust correctly matters, an incomplete trust can create as many problems as it solves. This is an area to work through with a qualified estate-planning attorney, who can tell you whether a trust, a will, or a combination fits your situation.