Who Needs a Living Trust? Smart Planning Moves for Your Future

who needs a living trust

Only 40 percent of Americans have a will or living trust.

More than half of the population has no legal control or protection over their assets in the event that they die or become incapacitated. Frighteningly, nearly a third of older adults have never even discussed their end-of-life wishes with their families. 

But the entire subject is often a source of confusion. Who needs a living trust? Who can get by with just a will? How do you know which category you fall into? 

Keep reading to learn what a living trust can do for you and if you or a loved one should create a trust as part of your estate planning process.

What Is a Living Trust?

While most people have a decent idea of what a will is and does, many wonder, “What is a living trust?” 

Like a will, a living trust is a legal document that designates control or ownership of one’s assets. Unlike a will, a living trust goes into effect immediately upon creation rather than upon the creator’s death. This means it can be used to:

  • Protect or control assets in the event of dementia or incapacitation  
  • Distribute assets in ways wills cannot 
  • Avoid probate 

Under a living will, an individual legally becomes the “trustee” of his or her own assets.

Types of Trusts

Living trusts should not be confused with testamentary trusts. Living trusts are established and take effect while the creator is alive. Testamentary trusts are created upon an individual’s death in accordance with his or her will. 

There are two kinds of living trusts:

  • Revocable
  • Irrevocable

In revocable trusts, individuals may add to, alter, or dispose of the covered assets at their discretion. 

Under irrevocable trusts, no changes may be made to the covered assets once the trust is established.  

The exact rules over what a trust may cover and how it is structured can vary from state to state.  

Who Can Create a Living Trust?

Anyone with assets of any kind can create a living trust. 

Many people mistakenly believe that only the wealthy need wills or trusts. This is untrue. Even individuals with modest estates benefit from clearly outlining their desires for themselves and their assets via the appropriate legal documents

Primary Benefits of a Living Trust

Individuals questioning “do I need a will or a trust?” often find the decision easier to make when they understand the numerous benefits living trusts can afford them. 

Protection Against Incapacitation

As of 2019, 14 percent of Americans 71 years of age and older have some form of dementia. That number is only expected to increase as the population continues to age. 

Living trusts protect both individuals and their assets in the event that they develop dementia or are otherwise incapacitated. With a living trust, incapacitated individuals can:

  • Restrict access to and control of their finances to the person(s) of their choice
  • Ensure that their assets are used according to their wishes
  • Prevent themselves from being assigned to conservatorship

Creators can also safeguard assets they wish to pass along to their families that might otherwise be sold to fund their care. 

Probate Avoidance 

Probate is a court-led process that typically occurs when an individual dies. It involves the assessment and distribution of the deceased’s assets. 

Whether or not its reputation is deserved, probate exists as something of a nightmare in the public consciousness. Living trusts can place assets outside of probate, thereby sparing survivors the pain and stress of that process. 

Granting Assets to Minors 

Technically, individuals can bequeath assets to minors via their wills. However, in those situations, a court-appointed adult is assigned to control the assets in question. They may continue to control them until the beneficiary is 18 or 21, per state rules. 

Living trusts enable individuals to specify:

  • Who controls the assets until the minor is of age
  • When the minor qualifies to receive their assets (e.g. upon graduation from high school or college)
  • What purposes the assets may be used for (college tuition, a vehicle, housing, etc.)

Secondary Benefits of a Living Trust

Living trusts also offer additional benefits that may be of interest in some situations. 

Pack-Up Plans

Living trusts can also allow creators to implement back-up plans. For instance, one might specify a primary beneficiary for an asset as well as a secondary beneficiary. This can ensure that precious items remain in the family instead of becoming subject to secondary assignment if the first beneficiary dies. 


Legal wills become public documents upon an individual’s death. Living trusts remain private, allowing people to mask their finances and decisions from open view.

This can be particularly valuable in situations involving:

  • Large sums of money 
  • Blended or second families 
  • Business assets 

Who Needs a Living Trust?

“Do I need a trust?” is a common question among individuals exploring their estate planning options.

While only you can decide if a living trust is right for you, these guidelines can help you make an informed choice.  

Property Ownership

If you own property that you wish the bequeath to specific members of your family, a trust may be a valuable investment. This is particularly true if:

  • Complicated family dynamics are involved
  • Both primary and secondary requirements are needed
  • Property is owned in multiple locations

Marital and Family Status

Married individuals can often easily pass shared property to their spouses. Unmarried couples may need a living trust to keep property out of probate and bequeath it as desired. 

Trusts can also be important for individuals whose legal next of kin are not willing or able to properly handle their finances in the event the creator dies or is incapacitated. Trusts can designate an alternate, more appropriate party instead. This can be particularly relevant for single individuals who would prefer their assets not be left to parents or siblings who do not share their values.

Age and Health 

Living trusts are especially valuable to individuals who are:

  • Older
  • Of any age but in poor health
  • Recently diagnosed with early-onset or chronic health conditions


The more assets you have, the more likely you are to need a living trust.

The types of assets matter, as well. Real estate, businesses, and other legally complicated assets may be a much stronger reason to invest in a living trust than simple net worth. 

Parents or Guardians of Minors

As noted, anyone who wishes to leave assets to minors and have control over how those assets are handled likely needs a living trust. 

How Do I Set up a Trust?

Always seek out a qualified legal professional to assist you in creating a living trust. 

“Why do I need a trust lawyer?” you may ask. “Can’t I write my own using online tools?” 

Although online sites may claim to enable you to quickly and cheaply write your own, this is rarely a good plan. 

  • Trusts must be carefully written to accomplish your goals
  • Exact rules governing trusts vary from state to state
  • Individuals with assets or beneficiaries in different states or countries face extra legal complications 
  • Items you forget to include are not folded into the trust and remain subject to probate

Before meeting with a professional, it can be helpful to make a list of your assets and your preferences about how they should be handled. Is it also important to consider what steps you would want to be taken if you were to become incapacitated. 

Start Planning Your Trust Today

If you read the guidelines on who should have a living trust and saw yourself in them, don’t wait. Now that you know all about who needs a living trust and why contact the experts today and get the help you need to protect yourself and your family. 

Future Financial Security: How to Set Up a Trust Fund in 7 Simple Steps

how to set up a trust fund

In the United States, less than 2% of the population receives a funds by a trust designation. 

Typically trust funds are inherited by the children when a parent dies.  

Passing down your money and property can be a difficult thing to deal with. However, preparing for this step can help you manage where it all goes and how you can help others. 

Continue reading to discover how to set up a trust fund in 7 simple steps! 

1. Choose Your Trust Fund 

There are a variety of trust funds that you will have to choose in the beginning stages of learning how to set up a trust. 

Revocable trusts allow you to control all of the assets and can make changes at any time. Irrevocable trusts happen when you give control of assets to a beneficiary. Other common trusts can be for educational purposes only while others can help people with disabilities.

Think about the purpose of your trust fund during this stage and consider charities during this step.

2. Select a Trustee

The trustee of your trust fund is the person that you will appoint to have power over your assets.

Some people use financial institutions as a trustee. Most people, however, assign a trusted friend or family member as the trustee. Whoever the trustee is, they will have power over your assets. They must be a person that you can rely on to make payments and help others, if necessary. 

If you don’t have a strong relationship with someone or can’t rely on them with basic responsibilities, you should look for another option. Some people use their attorneys to help find a trustee that can pursue your wishes. 

3. Include What’s Necessary

After you have identified the correct type of trust fund for your assets, you must write down a couple of details.

For a trust fund to work, you will need a trust creator, which is typically your role. You will also need to identify the property and assets in the trust along with the beneficiaries. This part will help family members get exactly what you intended them to. 

Throughout all of this, you will need a trustee to administer the entire process. You can take on this role for the remainder of your life or appoint someone else. Typically the person you appoint can only execute your wishes once you’ve passed away or become incapacitated.  

It is important to keep in mind that the distribution of your assets will depend on your spouse and children. 

4. Solidify the Details and Make It Official

Figuring out the details mentioned above may take some time, especially if you have never considered them in the past. 

After you have identified who will get what once you pass on, you will have to make it official. Typically a professional estate or trust attorney delegate this process. Our company has a team of excellent attorneys that can help you in the Wisconsin area. 

Finding a local attorney is crucial because they are well versed in local and state laws. With an attorney by your side, your trust fund can be completed. 

5. Put Away Your Money 

Now that you’ve gotten the details finalized, you can begin putting your money where your mouth is.

For someone to inherit wealth from a trust fund, there must be funds available. You can take your documents to a financial business or trust fund bank account. You can either deposit money into the fund over time or put a lot of money away at once. 

When putting away your money you should also consider your retirement plans. Overlooking retirement may leave you short on money in the future. Talking with your attorney can help you determine the best funding method for your lifestyle. 

6. Register With the IRS

Putting your money into an account will require a bit more documentation.

When you put money into an account, you must register it for tax reasons. Some trust funds that you create will need to have a unique taxpayer identification number. You must have this when filing taxes and taking care of legal work. 

7. Talk With Your Trustee

Throughout the process of setting up a trust fund and even beyond, you should be communicating with your assigned trustee.

Talking with your trustee can help them get a better understanding of your wishes and what you want your assets to go towards. Having an honest relationship is important if you don’t want your money and property to go elsewhere. 

After a death, handling wills and trust fund information can become overwhelming. Talking to your trustee beforehand can also enlighten them as to how the process works and what is expected of them. Helping your trustee along the way is recommended for smooth transitions during tough times.  

Learning How to Set up a Trust Fund Is Easy 

There will come a point in time when your children will inherit your money.

Learning how to set up a trust fund now can ensure that they receive the money and you know exactly where it is going. 

If you have property or money that you want to give to charities or family members, you must appoint a trustee to carry out your wishes. Typically, trustees consist of family members and trusted friends. You should talk to them about what is expected of them and where you want your assets to go. 

Don’t be afraid to get guidance from an attorney. They can help make this process go by quickly and stress-free.  

Be sure to check out our blog and contact us for all of your legal needs in the future!