Do I need a trust?

If you have been looking around for a will, you may have heard talk about getting a "trust."  But unless you are an estate planning attorney, you may not know what a trust is and whether you need one.  I can help you figure these things out.

First, what is a trust?  In the context of estate planning, a trust is simply an agreement between two "parties" on how to deal with assets.  I say "parties" because unlike most contracts, one person can be both of these "parties."  The parties to the trust are the grantor and the trustee.  The grantor agrees to place things into the trust, in exchange for the trustee administering the wishes of the grantor.  Simply put, a grantor funds a trust and the trustee does with those funds what the grantor directs.  

Another person involved in a trust is the beneficiary.  They are the receiver of the actions taken by the trustee.  If person X funds a trust that contractually binds person Y to pay the funds to person Z at certain times, person Z is the beneficiary of the trust agreement between person X and person Y.  

That is pretty technical.  Ultimately, a trust is just a way to hold property.  It's like having a will, but it avoids probate.  If you read my post about probate (find it here), you know that probate is the process by which the court oversees the distribution of assets and affairs once someone dies.  

The benefit of a trust is that it avoids probate: at death, the property in the trust is simply distributed according to the trust principles to the beneficiary or beneficiaries.  That is pretty simple.  This is good if probate is complicated, but most times, with a properly drafted will, it's not.  

The negatives of a trust are that it is a bit difficult to administer.  You see, with a trust, the trust has to "own" the things in it in order of the trust to be effective.  Rather than you personally owning your car, for example, your trust would own it. That way, at death, the new beneficiary of the trust would get your car. But guess what? If you don't put your car in the trust, it goes to probate.  So, unless you are going to scrupulously care for all of your assets by placing them in the trust, a trust is not going to do much for you.  I have seen countless trusts where people create the trust but never put anything in it.  That is just wasting money on a lawyer. 

Don't get me wrong - in the right circumstance, and paired with a properly drafted will, a trust is a great thing to have. But if you don't have a complicated estate, or don't want to deal with the hassle of living with a trust for the rest of your life, you may be better off getting a will.

Will By Attorney does both wills and trusts, and, to be honest, we make more money drafting trusts. But we would never recommend that you pay for something that you don't need, and sometimes a will is the better approach.

If you don't have a will, you can get here, drafted by an attorney without the hassle or cost of going to a law firm, and without the risk of doing it yourself.