A trust does two things: it provides a way for others to care for you if you become incapacitated and also dictates how your assets are distributed on your death. If you have a trust and you become incapacitated your successor trustee can take over your finances and help you without the need for a conservatorship (court supervised process). Even if you do not own a house, when you die you may have enough assets (over $150,000) that would require administration of your estate in court (probate administration). Probate administration is very expensive - the fees are set by statute based on the gross value of your assets. It is a slow court supervised process that most people want to avoid.
A "trust" is often described as any arrangement in which property (the "trust estate") is transferred by someone (the "grantor") to another person (the "trustee") for the benefit of a third person (the "beneficiary"). Trusts have existed for hundreds of years in England and the United States, originally being used to place an adult in charge of property which had been inherited by a child who was too young to manage his/her own affairs. The same person may occupy more than one position at a time. For example, in the typical living trust, as long as the Grantor is alive, he or she is also the Trustee and Beneficiary. On the death of the Grantor, a "Successor Trustee" (e.g., child, friend, professional fiduciary) takes over as Trustee and follows the Grantor's instructions, which are set forth in the Trust, concerning the distribution of property and the payment of taxes and expenses. Living Trusts and Probate Avoidance. Although living trusts have been around for centuries, only recently have they achieved a high degree of popularity among the general public. The reason for this surge in popularity is that living trusts help to avoid probate. You might be wondering, "What is probate, and why is everyone trying so hard to avoid it?" The short answer is that probate is a court-supervised procedure for collecting a deceased person's assets, paying debts and taxes, and distributing the property to the person's beneficiaries (either according to the instructions the person set forth in his or her will or as determined by state law if the person died without a will). The probate process usually takes 9 to 12 months to complete, although it may take longer in complicated cases.