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Why everyone needs a living revocable trust

Friday, 27 Sep 2013 | 2:03 PM ET
Trust or no trust?
Monday, 23 Sep 2013 | 12:00 AM ET
Why it's so important to have a living revocable trust, no matter what anyone says. Suze told Dave he had to make some tough cuts to fix his finances. What happened after the show? Dave's back with a follow up. Viewers ask if they can afford a Tesla, a 3-week honeymoon in the South Pacific.

Everyone needs a living revocable trust, says Suze Orman on this week's episode of "The Suze Orman Show."

In response to several emails and tweets asking why a trust is so mandatory, Orman spells it out. "A living revocable trust serves as far more than just where assets are to go upon your death and it does that in an efficient way," she said. Unlike a will, a living trust also covers you while you are still alive, Orman noted.

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You must think about what If something happens and you become ill and incapacitated. "Who is going to take care of you and pay your bills?" Orman asked. A key difference between a will and a living revocable trust is that the living trust has an incapacity clause that states who you want to sign for your affairs in the event you are unable to do so for yourself.

Be mindful of the key difference between a revocable trust and an irrevocable trust. An irrevocable trust cannot be modified or terminated without permission of the beneficiary. "Once the grantor transfers the assets into the irrevocable trust, he or she removes all rights of ownership to the trust and assets," Orman explained.

See more of Suze Orman's advice on this topic on "The Suze Orman Show" this Saturday, Sept. 28 on CNBC at 9 p.m. ET.

—By CNBC's Sakina Spruell. Follow her on Twitter @SakinaCNBC.

Contact The Suze Orman Show

  • Showtimes

    United States
    Saturday 5a | 9p | 12a ET
    Sunday 4a | 5a ET
    Asia (SIN/HK)
    Saturdays 07:00, 11:00, 16:00
    Sundays 01:00, 05:00, 11:00, 16:00
    Australia (SYD)
    Saturdays 09:00, 16:00, 23:00
    Sundays 05:00, 11:00, 16:00, 23:00
    Mondays 05:00
    New Zealand (NZ)
    Saturdays 11:00, 18:00
    Sundays 01:00, 07:00, 13:00, 18:00
    Mondays 01:00, 07:00
  • Host of "The Suze Orman Show," Orman is a two-time Emmy Award-winning television host and an expert on personal finance.

Suze Says