Call Us Today 931-250-8585


Do You Need a Trust?: Estate Planning Q&A

Posted by Nina Whitehurst | Jun 23, 2023 | 0 Comments

According to the 2023 Wills and Estate Planning Survey by, only 34 percent of Americans have an estate plan.

The primary reasons respondents gave for not participating in estate planning are:

  • Procrastination
  • Believing they need more assets
  • Not knowing how to make an estate plan

An estate plan is a comprehensive set of legal documents and strategies that organizes assets for a person's death or disability. Trusts are legal arrangements used in estate planning, alongside wills and advance directives.

Trusts as an Estate Planning Arrangement

A trust allows one person, known as the trustee, to manage funds and assets for one or multiple beneficiaries.

Trusts can be revocable or irrevocable.

  • Revocable trusts allow the grantor – the person creating and funding the trust – to change it during their lifetime.
  • With an irrevocable trust, the grantor cannot make modifications. Assets placed in this type of trust no longer belong to the grantor. Such trusts can therefore help someone qualify for government benefits, reduce their taxable estate, and transfer wealth.

Compared to wills, trusts can be more complex – and therefore more expensive – to set up. The value and utility of a trust will depend on your unique circumstances as well as the type of trust you use.

Avoiding Probate

A primary benefit of trusts is that they allow individuals to bypass probate, which can be time-consuming and costly for surviving loved ones. The court excludes property placed in trust from a probated estate.

In some cases, probate costs can consume 10 percent of an estate's value. The process can also take months to years to conclude, burdening family members.

Transferring assets outside probate via a trust also maintains privacy. The public can access probate records. The contents of a will might become publicly accessible since wills go through probate. But trusts, which stay outside probate, remain confidential.

Other Benefits of Trusts

In addition to avoiding probate, trusts can have tax benefits. By creating an irrevocable trust, individuals can lower the value of their taxable estate while transferring property to their loved ones. Or, if capital gains tax savings are more important, a properly structured irrevocable trust can ensure a step up in basis at death.

When you use a trust, you can have more control over assets than if you gave them to the recipient directly.

  • Those who wish to reward their loved ones for certain life events, like obtaining a college degree, can set up such stipulations in their trust.
  • Grantors with young children can set up a trust so that a child receives funds only upon attaining a certain age.
  • If a child's marriage ends in divorce, the trust may shelter the assets as separate property.

Benefits Eligibility

Older people and those with disabilities can also use a type of irrevocable trust known as a Medicaid Asset Protection Trust (MAPT) to qualify for Medicaid.

Individuals intending to use Medicaid to pay for long-term care may place into a MAPT certain assets that would otherwise disqualify them from Medicaid. Once Medicaid's look-back period has elapsed, they can qualify for benefits much more easily. Since a MAPT is irrevocable, the grantor no longer controls and owns the assets. As they can assign beneficiaries, they can transfer and benefit from their wealth without first exhausting their assets to go on Medicaid.

If you intend to rely on Medicaid in your retirement, consider speaking with an estate planning attorney to learn more about whether a Medicaid Asset Protection Trust could benefit you.

Special Needs Trusts

One type of trust that can be an invaluable estate planning tool for older adults with disabilities is a special needs trust (SNT). This type of trust can preserve the beneficiary's eligibility for Supplemental Security Income and Medicaid while providing for needs that public benefits do not cover. The trustee can use the SNT to pay for things like caregiving, outings, and entertainment.

Consult With Your Attorney

While not everyone needs to create a trust as part of a solid estate plan, trusts can benefit many people in transferring wealth. Call us to learn more about the optimal estate planning strategy for you.


About the Author

Nina Whitehurst

Attorney at Law Nina has been practicing law for over 30 years in the areas of estate planning, real estate and business law She is currently licensed in Alaska, Arizona, California, Colorado, Oregon and Tennessee. Her Martindale-Hubbell attorney rating is the highest achievable: 5 stars in peer...


There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

Areas We Serve

Aenean lacinia bibendum nulla sed consectetur. Donec sed odio dui. Maecenas sed diam eget risus varius blandit sit amet non magna. Nulla vitae elit libero, a pharetra augue. Curabitur blandit tempus porttitor. Morbi leo risus, porta ac consectetur ac, vestibulum at eros. Cras justo odio, dapibus ac facilisis in, egestas.