A married couple can use one basic living trust to handle both co-owned property and the separate property of either spouse.

To create a basic living trust, you make a document called a Declaration of Trust, which is similar to a will. You name yourself as trustee -- the person in charge of the trust property. Then you transfer ownership of some or all of your property to yourself in your capacity as trustee. For example, you might sign a deed transferring your house from yourself to yourself "as trustee of the Jane Smith Revocable Living Trust dated July 12, 2002."

Because you're the trustee, you don't give up any control over the property you put in trust. If you and your spouse create a trust together, you will be co-trustees.

In the Declaration of Trust document, you name the people or organizations you want to inherit trust property after your death. You can change those choices if you wish; you can also revoke the trust at any time.

When you die, the person you named in the trust document to take over -- called the successor trustee -- transfers ownership of trust property to the people you want to get it. In most cases, the successor trustee can handle the whole thing in a few weeks with some simple paperwork. No probate court proceedings are required.