Do I need a living trust?

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by Michelle Kaminsky, Esq.
updated March 17, 2023 ·  4min read

If you have heard the term “living trust" floating around, you've probably wondered, “Do I need a living trust?"

As with many legal questions, the answer is “maybe," so let's talk more about what a living trust is, how it differs from a last will, and what you should consider when deciding whether to make a living trust or not.

And then let's wrap up with why you should, absolutely, have at least some legal document that provides for the disposition of your assets after your death.

What is a living trust?

A living trust, or more technically a revocable living trust or revocable trust, is a legal document through which your assets are placed in a trust for your benefit during your lifetime as the “grantor" and then transferred to your chosen beneficiaries at your death by the person you have designated as your “successor trustee." This successor trustee would also become your representative should you become incapacitated—without the intervention of a court.

A living trust can be canceled or can have its terms changed by the grantor at any time.

Benefits of a living trust

There are some very good reasons to include a living trust in your estate planning, including the ability to avoid probate. Probate is the court-supervised process of distributing a deceased person's estate—and it can cost both time and money from start to finish. Because probate varies by state, so do costs and time frames, but the process can take upwards of a couple years to complete and can eat up as much as 10% of an estate's value.

The transfer of assets in a living trust to beneficiaries, on the other hand, happens outside the probate process, which can mean a faster delivery of inheritances with no additional costs incurred.

Another plus of a living trust is that it is a private document that never becomes part of the public record in the way that a will does. This means that any transfers of assets made through a living trust remain confidential among the parties involved, and no one can do a search to find out what you left to whom through the trust.

How to create a living trust

It isn't particularly difficult to set up a living trust, as the preliminary steps involve doing an inventory of your assets, deciding where you want them to go after you're gone, and choosing someone to handle the trust should you be unable to do so either through death or incapacitation. In writing up the trust, you can even use living trust forms found online.

Still, an experienced professional can be invaluable as you make a living trust to ensure that you are doing everything correctly—in creating the legal document, yes, but especially when it comes to “funding the trust" with your assets. This entails making sure your assets are all titled in the name of the trust; otherwise, they won't be included.

And, speaking of assets that aren't included, having a pour-over will is always a good idea with a trust, because it will catch any property inadvertently left out of the trust and include it in the distribution. This will save that property from being subject to state intestacy laws, which come into effect when someone dies without a will. These laws provide for distribution based on familial relationships—which may not match what you would have preferred.

Living trust vs. will

When deciding whether you need a living trust or a will, it's important to understand the differences between them. Like a living trust, a will directs the disposition of your assets after your death, but it doesn't provide for the lifetime management of assets in the way a living trust does. The provisions of a will go into effect only after your death.

Moreover, a will does go through probate, and this makes it a document of public record.

Those who have more complicated familial situations (such as children from more than one relationship), a family business, a lot of assets, or property in more than one state might consider using a living trust to set out a clear estate plan.

People with fewer assets, a modest estate, or just a relatively simple estate distribution plan most likely don't need a living trust, which, incidentally, generally has more upfront costs than writing a will—and that may also be a consideration in deciding whether you need to include a living trust in your estate plan.

Still, get a will

The bottom line, though, is that everyone can benefit from making a last will, whether or not you also have a living trust. So even if you're not ready to choose between will vs. trust at the moment, you should strongly consider at least drawing up a last will and testament to better get your affairs in order.

All estate planning, after all, is done with the intention of giving yourself the peace of mind that your affairs will be handled according to your wishes after you're gone and of making things easier on your loved ones during an already tough time.

So why not get started today?

Creating a living trust through LegalZoom is fast and easy. Get started by answering a few simple questions. We'll review your work for completeness and consistency, and you'll receive your living trust with signing instructions.

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Michelle Kaminsky, Esq.

About the Author

Michelle Kaminsky, Esq.

Freelance writer and editor Michelle Kaminsky, Esq. has been working with LegalZoom since 2004. She earned a Juris Docto… Read more

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.