One common use of living trusts is to create a life estate for someone who will ultimately not be inheriting the asset.

A common situation occurring in blended families is one spouse bringing the primary residence into the marriage and wanting a surviving spouse to have use of the home before being distributed to the deceased owner’s/spouse’s heirs.

To avoid worrying about the heirs forcing the surviving spouse out of the home, the trust can hold the home for any duration desired by the trustor and, if listed in the living trust, continue to pay any expenses associated with the home.

Once the surviving spouse passes or moves out of the home, the home can be sold and money split among the beneficiaries.

Other typical situations include caring for other family members, such as parents living with the children or in a second home owned by child. Similar to the situation described above, the family member(s) may continue to live in the home after the trustor has passed without worrying about the beneficiaries forcing the person out of the home.

The legal language required to create a life estate is often not more than a few paragraphs so be aware if adding a clause for a life estate requires an unreasonably higher fee.