A living trust has advantages that a will can’t offer, so you may want to keep both. A revocable living trust is similar to a will in that it indicates how you would like your assets to be distributed after your death and can be amended anytime. While you should always have a will, a living trust—which is simply a trust set up during your lifetime as opposed to one created after your death—can be a valuable addition to your estate plan.
A recent article in Time, titled "Why This Estate Planning Tool Beats Just Having a Will," gives several reasons to consider living trusts.
The estate can be settled more quickly. The assets in a trust are not required to go through the probate process, which can be lengthy and expensive. Your heirs will be able to zip past any inconvenience of a court-supervised distribution of your estate—and there is no wait for creditors to file claims, which you have to do with a will even when there are no debts. Now some states have some form of expedited probate for estates less than a certain dollar value. This is different in every state, so ask your estate planning attorney about how the law works where you live. New York, for instance, has this type of process if the estate property, not including real estate, is worth less than $20,000. Also, the original article reminds us that when most of the estate is in IRAs or life insurance, you may bypass probate if you have named beneficiaries.
You get "back-up investment help". If you create a trust, you will need to name a trustee. The trustee is tasked with managing the assets, paying any taxes, keeping financial records, and disbursing payments to the beneficiaries. There might also be a successor trustee named in cases where you are managing the trust yourself. If so, you have someone to take over the trust duties in the event you become disabled or incapacitated and cannot manage your money for yourself.
You get to set things up for your children. You should also consider a trust if you have minor children or heirs with special needs. A nice feature of a trust is that you have the option to add terms that detail how and when a child is entitled to receive the assets. And, since a living trust is not a matter of public record (i.e., filed with the probate court), the distributions for your children are protected from prying eyes of outsiders.
Finally, the original article reminds us that you should not transfer (retitle) an IRA to a living trust because it is counted as a withdrawal. This could mean a substantial financial penalty in terms of both income taxes and excise taxes, depending on your age.
After you have read the original article, contact an experienced estate planning attorney. Together, you will want to go over all of the details of your situation and see if a trust will help you and your family.
Reference: Time (October 6, 2014) "Why This Estate Planning Tool Beats Just Having a Will"