Living Trust vs. Life Estate

Can you tell me what a Life Estate is and how does if differ from a Living Trust. I live in Wyoming as does my mother-in-law. My father-in-law passed away last year and our eyes where opened to the problems that acompany that life event.I have been told that the amount of the estate (if very large) can create problems if you have a Life Estate. Is that true?
Needing info in Wyoming,
Colliefied.

[abezon]

In simple living trust cases, A & B transfer property into a trust with A & B listed as the trustees. A&B use the property for their benefit. A&B can change the terms of the trust up until one of them dies. Once that happens, the survivor administers the trust. The survivor continues to use the property for his/her benefit. When the survivor dies, the successor trustee C distributes the trust assets to the secondary beneficiaries (usually also C).

The advantages of living trusts is that the assets owned by the trust avoid probate court. It's also a good way to provide for a second spouse while making sure the children from the first marriage are protected. Depending on various factors, half or all of the trust's assets are included in the estate of the first person to die. These assets are not included in the estate of the second person to die, because they belong to the trust. Thus, a living trust can a married couple with over $1.5M in assets transfer $3M to their heirs without paying estate taxes.

The disadvantage of a living trust is that it is expensive to set up (may not save anything over probate costs), and that everything has to be transferred to the trust for it to have maximum estate planning effect. Also, many people with living trusts don't understand what they've got or why. You also still need a will to cover anything not titled int eh trust's name.

A life estate transfers title to land to the ultimate beneficiary, but allows the life estate recipient (usually a surviving spouse) to live on the land until they die. It's simpler than a living trust, but the beneficiary does not get as big a step up in basis, since the land is probated when the first owner dies but the beneficiary does not receive full title until years later.

I suggest some basic estate planning books from the library.