When it comes to estate planning, the word “trust” often gets thrown around as the gold standard. You’ve likely seen headlines or heard advice suggesting that everyone needs a trust to avoid probate, qualify for Title 19 benefits, reduce taxes, or keep family matters private. But is that really the case?
In truth, many people don’t need a trust at all. A well-drafted will, paired with essential documents like a Power of Attorney and Healthcare Proxy, can provide a solid, effective, and affordable estate plan for the vast majority of individuals and families.
What’s the Difference?
A will is a legal document that outlines how you want your assets distributed after your death. It allows you to name guardians for your children, appoint an executor, and express final wishes. Wills go through probate—a court-supervised process—but for most people, this is a manageable and relatively straightforward step.
A trust, on the other hand, is a legal arrangement that allows a third party (the trustee) to hold assets on behalf of beneficiaries. Trusts can take effect during your lifetime or after death and can be useful in more complex situations, such as:
- Owning property in multiple states
- Planning for a family member with special needs
- Wanting long-term control over how assets are used
- Anticipating estate tax issues for high-net-worth estates
When a Will Is Enough
For most people, especially those with modest estates and straightforward family situations, a will-based plan is sufficient. When combined with a Power of Attorney (to manage finances if you become incapacitated) and a Healthcare Proxy (to make medical decisions on your behalf), a will can ensure your wishes are respected without the added cost and complexity of a trust.
The Problem with Misinformation
Trusts are often overhyped in media and by marketing campaigns that play on fear or confusion. While trusts serve an important role in specific cases, they’re not a one-size-fits-all solution. In fact, unnecessarily setting up a trust can lead to extra legal fees, administrative work, and ongoing responsibilities that may not be needed.
Peace of Mind, Simplified
At the heart of estate planning is one simple goal: peace of mind. Knowing your affairs are in order and your loved ones will be taken care of is what really matters. For many people, this can be accomplished with a thoughtfully prepared will, complemented by the right supporting documents.
If you’re unsure which option is best for you, it’s always smart to consult a professional who can look at your unique situation—without pushing unnecessary products or services.