The advantage Living Trust brings to estate planning is very substantial

Advantage living trust
• plan your estate and retain control of assets until death
• prepare for incapacity or senility of yourself or other beneficiaries
• arrange financial support for family members
• avoid expense of probate court
• expedite transfer of assets to beneficiaries after your death
• keep the estate matters private (probate is public)
• can legally avoid taxes in some situations using A B Living Trust

Another advantage living trust offers is preparation for the incapacity or senility of yourself or other beneficiaries. The trust instrument can provide that the other co-trustee shall act as sole trustee if the grantor becomes incompetent or disabled.

A married couple with an A B Living Trust can effectively double their estate tax exemption amount with a formula clause. A formula clause takes advantage of the unlimited spousal deduction allowed under the internal revenue code.


Potential disadvantages of a living trust
Despite the large advantages, there are also some negative aspects to a living trust in the United States. Beneficiaries may not save on estate or state inheritance taxes, although they will save on probate costs. Setting up a trust, and paying corporate trustee fees may be expensive. The set up expense is immediate, not after the grantor's death.

Disadvantages of the A B Living Trust
The most significant disadvantage is that the surviving spouse cannot sell their spouse's share of the property. Since there are no estate taxes due on property transfers between spouses, the tax benefit is not important to the surviving spouse, just the heirs. If the estate falls under the exempt estate amount there is no tax due.

Administrative costs are another potential disadvantage of the A B Living Trust. The surviving spouse must keep separate books and records for the two portions of the trust. This may be expensive and burdensome, and could become unnecessary with the potential changes to the estate tax law.

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