Is it worth having a trust?

A trust allows you to be very specific about how, when and to whom your assets are distributed. On top of that, there are dozens of special-use trusts that could be set up to meet various estate planning goals, such as charitable giving, tax relief, and more. In general, the disadvantages of a trust are significantly offset by the numerous advantages that are created by having a living trust. The biggest advantage of a living trust is that, unlike a last will and will, a trust allows you to avoid probate court.

There are three main reasons why this is important. Revocable trusts are a good option for those who care about keeping records and information about assets private after your death. The probate process to which wills are subject can make your estate an open book, as the documents entered into it become public records, available for anyone to access. Trusts are generally considered tools for the rich, yet wealth is not a prerequisite for reaping the benefits of owning a trust.

Trusts can be useful estate planning tools for many people, but they may not be worth the expense for people who don't have many assets. Although estate planning is sometimes considered only for the ultra rich,1 alternatively, trusts can be useful planning vehicles regardless of age or net worth. If the trust assets are, for example, a summer house or a favorite painting, they can be enjoyed both after being deposited in a trust and before and possibly more, because the grantor knows that the property will ultimately go to support a worthy cause. Probate probate is a public process and allows anyone to see what was in their estate when they died, how much their estate was worth, and the people who received their things.

However, if your home is the only big investment you own, it might be worth using a trust just for that house. Trusts are often wrongly associated with people who might have higher net worth, but trusts aren't just for rich people. The contents of wills and estates go to the public record after the probate process is complete, so that anyone can see what he owned, what it was worth, and who received it after his death. In the end, a little extra paperwork and recordkeeping is worth much more than the time and money that will be wasted on probate, not to mention the stress your family will have to go through to access your assets after you die.

The cost of a trust may also not be worth it to you if you still plan to have other assets go through probate, especially valuable possessions that could delay the estate or result in a contested will. But given the expenses associated with opening one, it's probably not worth it unless you have a certain amount of assets.