In very broad terms, there are three categories of people that need a revocable living trust. They include the following:
Anyone who owns real estate and needs to name a beneficiary for it.
Anyone with young or otherwise "immature" children or beneficiaries.
Anyone subject to the federal and/or state estate tax.
There are obviously more people who need a revocable living trust, but this seems to be the "big three" when it comes to myself and my law practice. Before I discuss each of these three categories, I believe it is worthwhile to first describe what a revocable living trust is. The best way to describe a trust is as a "box". While you are alive and well, you serve as the trustee of your own trust, and you decide which assets go into the trust. If anything happens to you, such as death or incapacity, the successor trustee(s) is handed the "box" with instructions on what to do with the contents. If you are still alive (just unable to serve as trustee for whatever reason), then the instructions are to use the assets on your own behalf (i.e. to pay your legitimate bills). If you are deceased, then the instructions are to distribute the assets in the "box" to the specified beneficiaries. It's similar to a will but different since a trust can hold "title" to assets like real estate and financial accounts (in an effort to avoid probate). With that background, we are ready to explore the three categories of people who need a revocable living trust.
Category #1: Anyone who owns real estate and needs to name a beneficiary for it.
I am a firm believer that all real estate (i.e. your house or condo) should be "titled" to some sort of legal entity. A revocable living trust is a form of legal entity but there are others such as LLC's, Corporations, etc. The benefit of having real estate in a revocable living trust is it names a beneficiary for the asset. This is similar to naming a beneficiary for your retirement plan or life insurance.
Category #2: Anyone with young or otherwise "immature" beneficiaries.
If you want to leave assets to a beneficiary who is not quite ready to handle on his or her own, then establishing a revocable living trust while you are alive and well is an must. This way, you can name a successor trustee(s) who can over see the money for the young or immature beneficiary for as long as needed. We can't predict the future but we owe it to those we love to have some plans in place in case anything tragic happens. The trust can serve as the primary or contingent beneficiary to such things as retirement plans and life insurance and can hold "title" to real estate and financial accounts (i.e. bank and investment accounts).
Category #3: Anyone subject to the federal and/or state estate tax.
Currently, very few people pay an estate tax. However, there are some that do. The deciding factor is the federal and estate tax laws in place at the time of your death and the State of residence (again, at the time). If you are subject to either the federal or state estate tax, it usually makes sense to put assets into living trusts in an effort to eliminate or at least reduce said tax.