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.
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.