I know nothing about this but my wife said a trust might be easier to pass money to inheritors than a will.
What is she planning? 
What are the pros and cons of setting up a trust?
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Setting up a trust was on my todo list last year and it didn’t happen. It’s again on my todo this year. Fingers crossed.
You need both, esp when you own a home.
You must create a revocable trust (use some attorney) and he will also help create a will (This is called pour over will). During the course of many years, you may buy and sell estates and other items, but may forget to add it to the trust.
In case of death, the pour over will take effect and will provide a way to “Unknown or unsaid” properties/items you own will be attached to Trust.
Combined trust and will, you have complete document for the court to review and give it your heirs.
Trust lawyer will prepare everything as a package. This is part of Trust creation.
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There is no tax advantage, as far as I know. But trust can prevent the government (state) from getting involved. So anything that is not in joint account will go thru probate. This is where the court makes all your assets info public and allows others (like your illegitimate child or long lost cousin) to make claims on your assets. The process can take up to a year.
I believe when 1 spouse passes away and there is 1 surviving spouse, it should not be an issue. In California, the spouse will get everything by default. But if both spouses passed and asset is giving to child or children, then it can be messy if there other parties involved or who come forward to make a claim.
Trust will avoid probate. So the state won’t even get involved. Will does not avoid probate. Will provides your instruction to the state on what you want, but then state will make a decision base on circumstance.
We got our trust, will, and advance health care directive done thru Met Life Legal plan, which is like an optional employee benefit (like health care, dental insurance, etc). Not many companies offer this. My previously employee did. So we sign up in October during open enrollment. And I think it cost like $20-30 per 2 weeks. So in that 1 year, it cost us $650 to pay for this benefit.
I heard it cost $2k-4k to get trust done by lawyer. Alternatively, there are online kits that you can purchase, which will guide you thru the process and you do all the work. They cost like $100-$300. Nolo, Legal zoom, Suze Orman, etc.
I don’t think the paperwork is that hard. I heard the hardest part is to get property title changed. In our case, the lawyer took care of all properties. A friends who lived in Fremont had to go to county records in Alameda and spend 1/2 day in line. And if you have multiple properties (in multiple counties), this can be a huge hassle. Not sure nowadays with Covid, if you can get title changed online.
All assets should be under the trust to be covered. So it makes sense to put property titles into the trust. And maybe select bank and investment accounts with large balances. You should not put 401k into trust, as it can incur tax consequences.
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My parents did a Living Trust and I would advise against it unless you have a net worth in excess of 10 million. It can complicate tax filings and the costs can add up over the years. When one spouse dies the trust is now split into an “A” trust and a “B” trust each of which needs a separate tax return filed. To make matter worse the cost basis of assets in the “B” trust is date of death of the first decedent. Contrary to popular belief estates in trusts do not necessary settle faster that those controlled by a simple will. My mother died in 2018 and things are mostly but not completely settled at this point. My dad died in 2009 so all the “B” trust assets have a cost basis immediately post the greatest market crash in a generation. Screw me.
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Trusts have downsides. They don’t really speed the settlement of an estate. There are time and administrative costs associated with making sure everything is in the trust. If you have foreign assets the country in question may not recognize trusts. And when one married partner dies you now have two trusts with the cost basis of assets in the second one set at date of death of the decedent. If the other partner dies years or decades later you can have large paper capital gains you wouldn’t have otherwise. So your tax liability is actually greater.
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Are you referring to living or irrevocable trusts? Is fairly common for well to do families to setup living trusts for liable protection vs spouses and creditors and irrevocable trusts for transferring wealth while they are alive.
Referring to living trusts. I would have been better off if my parents had never established one.
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