Probate

One of the most frequently cited reasons for having a living trust is to avoid probate upon death. What many people may not realize is that a similar procedure also may occur during life, if a person becomes disabled. The procedure is called a conservatorship and results when the owner of property no longer has capacity to manage the property. In this case, the court is called upon to appoint someone to manage the property. This concept takes on more relevance when you consider that a person is four to six times more likely to become incapacitated than they are to die in the next year, according to "21st Century Wealth:  Essential Financial Planning Principals" (Quantum Press LLC 2000).

The cost of probate varies from state to state. In Arizona the cost generally depends on the complexity and size of a person's estate. Assets that are in a living trust do not go through a probate process--which means that if all of your assets are placed into the living trust during your life, there will be no probate upon your death.  Just as important, when you have a fully funded trust, there will be no need for conservatorship if you become disabled.  Court involvement is replaced with a smooth transition to a successor trustee who manages your assets when you're no longer able to do so. What's more, if you own property in two or more states, all of those properties can be funded into the same trust. If you use only a Will, it is possible that there would be a probate in each state in which you owned real estate.