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The living trust does not pay income tax on income that is distributed to the trust beneficiaries during the tax year. The beneficiaries pay income tax on the income they receive from the trust. If the living trust does not distribute all of its income, it must pay income tax on the undistributed income.

Revocable trusts provide privacy. Anyone can see what stipulations are in your will, who your beneficiaries are and what each beneficiary is inheriting. Estates in a living trust are distributed in private. No one can search the public records to see where your assets went.

A living trust isn't absolutely necessary for everyone but it will certainly help if, for instance, you have a lot of assets, you own property in more than one state, or you have an extended family where things could be more complicated. Also, it's not just a question of how much money or property you have.

Normal ranges tend to be somewhere between 1 and 1.5 percent of the estate value. Ironically, the larger the estate, the lower the percentage typically is. Some firms also charge a minimum annual fee to protect themselves against putting in a lot of work for relatively small estates.

Using a revocable living trust instead of a will means assets owned by your trust will bypass probate and flow to your heirs as you've outlined in the trust documents. A trust lets investors have control over their assets long after they pass away.

Whether you are selecting an executor, trustee or agent, the selected person should, if possible, be someone that you know very well and someone who you find to be trustworthy and honest. Generally, this is not a difficult choice for married couples with have children and/or adult grandchildren.

While you're alive, everything in the trust is considered your personal property.Its primary purpose is to avoid probate court, since revocable living trusts do not reduce estate taxes. With a revocable trust, your assets will not be protected from creditors looking to sue.