Once I understood the basics of a will, the next question I kept running into was whether I also needed a trust. The word gets thrown around like it’s something only wealthy people need. That isn’t really accurate — but it’s also not something everyone needs either. So I dug into what a trust actually does and how it’s different from a will. Here’s how to tell if it’s actually worth the extra step for your situation.
Quick answer: A trust is a legal arrangement where you transfer ownership of assets to the trust itself, managed by a trustee, for the benefit of whoever you name. The most common type for everyday estate planning is a revocable living trust. Unlike a will, it can let your estate skip probate entirely, and it lets someone step in to manage your finances if you become incapacitated. Trusts cost more to set up than a will, and they require more ongoing maintenance — you have to actually retitle assets into the trust’s name. They make the most sense if you own real estate, want to avoid probate, or want built-in incapacity planning, not automatically for everyone.
What Is a Trust, Actually?
A trust is a legal entity that holds assets on behalf of beneficiaries. It’s managed according to rules you set up when you create it. Three roles matter here. The grantor is you — the person creating the trust and putting assets into it. The trustee manages the trust’s assets, often yourself while you’re alive and well. The beneficiaries are who the assets are ultimately for. The most common type for retirement-age estate planning is a revocable living trust. You can change or dissolve it at any time while you’re alive.
Trust vs. Will: The Real Differences
A will only takes effect after you die, and only after going through probate. That’s the court process that validates the will and oversees the estate. A revocable living trust works differently. Assets you’ve actually transferred into it bypass probate entirely, since it already legally owns them rather than you personally.
The other major difference is incapacity planning. A will does nothing for you while you’re alive — it only matters after death. It can name a successor trustee who steps in to manage your finances immediately if you become unable to. No court needs to appoint a guardian or conservator. That’s a real practical advantage a will alone doesn’t offer.
Trusts also stay private. A will becomes a public court record once it goes through probate. A trust generally does not, which matters if you’d rather keep your finances out of the public record. For the basics on wills themselves, see my wills basics guide. The American Bar Association’s estate planning resource center is a good authoritative reference if you want to go deeper on the legal side.
Why People Actually Use Trusts
Avoiding probate. Probate can take months, sometimes over a year, and involves court fees and often attorney fees. Assets properly held this way skip that process entirely.
Incapacity planning. If you become unable to manage your own finances — from illness, injury, or cognitive decline — a successor trustee can step in immediately. No court proceeding is needed.
Privacy. Trust terms and assets generally stay private, unlike a probated will.
Real estate in multiple states. Owning property in more than one state can mean probate in each state separately if it passes through a will. A trust can avoid that entirely.
Revocable vs. Irrevocable Trusts
A revocable trust — the kind most people mean when they say “living trust” — can be changed or dissolved by you at any time while you’re alive. You keep full control. The tradeoff: because you still control it, a revocable trust’s assets still count as yours for things like Medicaid eligibility and creditor claims.
An irrevocable trust can’t be easily changed once created, and you generally give up direct control over the assets inside it. In exchange, creditors typically can’t reach assets in an irrevocable trust, and those assets don’t count toward your own assets for Medicaid eligibility. That’s why irrevocable trusts sometimes come up in long-term care planning. That’s a more specialized, higher-stakes decision that’s worth a conversation with an elder law attorney rather than a DIY approach.
Do You Actually Need One?
A trust tends to make the most sense in a few situations: you own real estate, especially in more than one state. Or you want to avoid probate specifically, or you want built-in incapacity planning. It’s also worth considering with a blended family, where you want more control over how and when beneficiaries receive assets than a will alone provides.
A trust is often more than you need if your estate is simple. That’s especially true if most of your assets already pass outside of probate anyway — retirement accounts and life insurance with named beneficiaries, or jointly-owned property. It also matters less if probate in your state is relatively fast and inexpensive, since some states have simplified, quicker probate processes than others.
If you decide a trust makes sense, [AFFILIATE PLACEHOLDER: link to Trust & Will’s trust-creation service once approved] offers a guided online process for setting one up. No need to start from an attorney’s hourly rate. It’s still worth having an attorney review anything with real complexity. [AFFILIATE PLACEHOLDER: link to Nolo’s WillMaker software once approved] is a comparable option worth checking too.
Frequently Asked Questions
Do I still need a will if I have a trust?
Yes. Even with a trust, you need a “pour-over will.” It catches any assets you didn’t get around to formally transferring into the trust before you died — otherwise those assets would go through intestate succession instead.
Is a trust only for wealthy people?
No. That’s a common misconception. Trusts are useful for anyone who owns real estate, wants to avoid probate, or wants incapacity planning — not just people with large estates.
Does a trust protect my assets from Medicaid?
A revocable trust does not — assets in it still count as yours for Medicaid eligibility. Only certain irrevocable trusts, set up well in advance and with specific rules, can affect Medicaid eligibility. That’s a specialized area worth an elder law attorney’s guidance.
How much does it cost to set up a trust?
More than a basic will — often a few hundred to a couple thousand dollars depending on complexity and whether you use an online service or an attorney. You also need to actually retitle assets, like your home, into the trust’s name for it to work. That takes some follow-through after you create the trust document itself.
Can I be my own trustee?
Yes, for a revocable living trust. Most people name themselves as the initial trustee, then name a successor trustee to take over if they die or become incapacitated.
Where to Go From Here
If you haven’t already, start with my wills basics guide — almost everyone needs a will, whether or not a trust makes sense for you too. For the fuller picture of how wills, trusts, power of attorney, and healthcare directives all fit together, see my estate planning checklist.
As always — I’m not an attorney, just someone working through these decisions myself and sharing what I learn. Trust law varies by state and can get genuinely complicated. It’s worth a conversation with a licensed estate planning or elder law attorney before setting one up. That’s especially true if Medicaid planning or a blended family situation is part of the picture.