Benefits

• Different states have different threshholds for taxation.Making a financial plan image by Allen Stoner from Fotolia.com
  
  Having a trust will avoid probate, thereby keeping the value and contents of an estate from public view.
  
  Each state has different dollar thresholds that determine whether it is better to have a revocable trust or a simple will for tax purposes.
  
  A trust agreement can cover situations where the grantor's competency comes into question, avoiding a court-appointed trustee. This is also true of guardianship.
  
  For personal accounting, having as many assets as practical in the trust makes the job of following them relatively easy.
  
  

Disadvantages

• Some auto insurance companies will want you to keep a car in your name, not the trust's.classic sports car image by TA Craft Photography from Fotolia.com
  
  In the case of divorce, the trust agreement must be amended as it does not end automatically as it would in a will.
  
  Trusts must make estimated tax payments, but they do not have the same luxury of choosing a tax year as wills.
  
  Some states, but not all, charge income tax on trusts as opposed to estates.
  
  Not all assets are suitable for a trust. A car could cause a problem with insurance if it is in the trust's name.
  
  The costs of creating a trust are up front.
  
  

Self-Written Trusts

• Doing it yourself requires a well-organized record keeper.pile of paper sheets with paper-clips image by stassad from Fotolia.com
  
  Anyone can set up a revocable trust. Legal forms are available at most office supply stores.
  
  Revocable trusts do not need to be notarized. There are caveats, however. Unless the pitfalls and gaps in covering specific situations are eliminated, it will be worthless.
  
  Most states do not require a witness or registration, so it is important to check each state's regulations.
  
  

Hiring a Lawyer

• Hiring a lawyer may be money well spent considering the legal paperwork.Documents image by GHz from Fotolia.com
  
  Lawyers charge by the time spent on your job. Therefore, assemble beforehand a list of all the assets you might want to put in the trust, including names, addresses, phone numbers and value.
  
  Local bar associations can supply a list of their members who practice in your state. They can also give you information on pro bono lawyers who will charge according to your means.
  
  AARP also lists lawyers who give a discount to seniors, but that doesn't necessarily mean they are cheaper or more qualified.
  
  Most lawyers will give a free consultation to see if you understand and trust each other.
  
  

Funding the Trust

• A rubber stamp with your signature will eliminate the bother of adding "trustee" to your name.Rubber stamp image by Bartlomiej Nowak from Fotolia.com
  
  Funding the trust is perhaps the most time-consuming part of the job. All assets must be registered in the name of the trust. That includes bank accounts, brokerage and retirement accounts, real estate if applicable, and any other real property owned by the grantor (owner) of the trust.
  
  The lawyer will tell you what is desirable to include and what is better provided in a will. The trust will not supplant a will. It will enhance it.
  
  When writing or endorsing checks on the account, it will be necessary to sign as "trustee"--a minor inconvenience that can be overcome by having a stamp made.
  
  

Warning

• The promise of making or saving money always attracts unscrupulous salespeople.business man pointing card with dollar image by Jorge Casais from Fotolia.com
  
  Like everything else, writing trust agreements has been plagued by crooks.
  
  To quote the American Bar Association, "A number of scam artists, playing on elderly people's fear of probate and suspicion of lawyers, have taken to hawking living trust kits door to door or through seminars. Some of these hucksters deliberately exaggerate the costs and difficulties of the probate process..."
  
  The subject of revocable trusts is so immense, it would be wise to read up on all the innuendos and "ifs" before you decide to craft your own trust.