Is a Living Trust Worthwhile?Submitted by Brian Gaffney on July 1st, 2019
Is a Living Trust Worthwhile?
A look at what it can (and cannot) accomplish in estate planning.
Are living trusts as necessary as some make them out to be? The fact is that they are not for everyone. However, they
can be used to pursue (and realize) some key estate planning objectives.
A properly written and executed living trust has three key benefits. One, assets placed within the trust are exempt
from probate. Two, a living trust is a private document—the way assets from it are distributed will never be made public.
Lastly, although creating a trust may cost more than creating a will, trusts are often cheaper for heirs to execute than
Not all assets need living trust protection. Some assets routinely transfer to heirs without being probated—Individual
Retirement Accounts (IRA’s), workplace retirement plan accounts, payment-on-death bank accounts, and insurance
policies among them.2
Inevitably, some assets may be left outside the trust. Many people live for years after the creation of their living trust
and acquire further assets. Unless a pour-over will is subsequently written and authorized to direct those assets into the
trust at your death, they will be distributed to your heirs the way the courts see fit (and pour-over wills must be probated).
A living trust is not considered a will substitute.3
Living trusts lack creditor protection. They are not exempt from “predators and creditors” who might want a piece of
All this said, the larger your estate, the more useful a living trust may be. So, as you think about your wealth and
your heirs, you should explore whether a living trust is appropriate for you.