In my prior posts, I have explained that a Living Trust is mostly a lucrative marketing scheme invented by attorneys to pray on the insecurities of senior citizens by scaring them with the words “death, taxes, and probate”.  See   However, there are four situations where it actually makes sense for a senior citizen to have a Living Trust.

First: If a senior citizen owns a home outside of Maryland, transferring the out-of-state real property to a Living Trust will avoid probating the home in the other state.  

Second: If one spouse lacks capacity to manage his or her financial affairs, a Living Trust can be structured so that a successor trustee (usually a family member) will be appointed if the competent spouse dies first.   Note, however, the same result can be achieved with a limited power of attorney, which transfers management of the senior citizen’s financial affairs to another family member.

Third: If the senior citizen’s children do not live in Maryland or a nearby state, it may be inconvenient for the children to serve as the Executor or Personal Representative of their parents’ Estate.  If the senior citizen’s Estate consists of many different assets, a Living Trust may simplify the disposition of the senior’s assets.    

Fourth: If the senior citizen owns many dozens of different stocks and bonds in his or her non-retirement brokerage account, probate requires accounting for the disposition of each individual security.   In contrast, a Living Trust does not require a detailed accounting of the disposition of each individual security.   The other solution is for senior citizen to own five to ten mutual funds in lieu of many dozens of different securities.