What are Pros and Cons of a Living Trust?

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A living trust can provide greater control over asset distribution.

People like to be in control.

It provides comfort in predicting outcomes.

It also minimizes the negative impact other people can have on us.

The problem?

Complete control is an illusion.

Humans are affected by weather, natural disasters, car accidents, governments, and even other individuals.

Although complete control is impossible, you can take steps to prepare for negative events and make your wishes legally binding.

A living trust accomplishes both.

A living trust can afford greater control.
A living trust allows you to maintain some control over your assets when you die.

What is a living trust?

A living trust is a legal document and estate planning tool.

Assets titled in the trust are held for your benefit during your lifetime and are transferred to beneficiaries after your death.

A trustee is responsible for managing the trust according to the instructions outlined in the living trust document.

While you are alive, you can serve as the trustee even if you created and funded the trust.

The flexibility and control available in these trusts make them popular estate planning tools.

What are some of the advantages of a living trust?

Avoiding Probate

When an estate plan utilizes a last will and testament as its foundation or when no estate planning documents exist, then probate may be necessary.

This is the case when the assets of a decedent have no surviving joint owner or designated beneficiaries.

By using your assets to fund a living trust, you can bypass the probate process.

Why would people want to avoid probate?

Because probate involves the local court, it is a public process and can also be costly in time and money.

A living trust allows you to pass assets to your heirs privately and even quickly.

Control Over Asset Distribution

Living trusts allow you to designate exactly how you would like your assets managed and distributed.

When would this be beneficial?

Greater control over the distribution of assets is helpful when your list of heirs includes minor children or loved ones who have not demonstrated financial responsibility.

With a living trust, you can provide directions for making distributions at certain ages or after specific milestones, like graduating from college.


Living trusts are a type of revocable trust.

For this reason, they can be terminated or altered if your circumstances or wishes change.

Their flexible nature allows living trusts to be adjusted so your estate plan can address changing financial situations or newly acquired or divested assets.

Some trusts can continue multi-generationally to keep assets in the family line while avoiding potential divorces, lawsuits, and bankruptcies along the way.

Incapacity Planning

Illness and accidents can cause sudden incapacity.

Without certain legal documents, you and your loved ones could be left financially vulnerable.

Family members might be required to go to court for authority to pay bills and authorize medical treatments.


A living trust will allow the successor trustee to step in immediately to handle your finances for your benefit rather than waiting for the courts to appoint a conservator.

Estate Tax Benefits

When it comes to federal estate taxes, the current limits are set at $12.92 million in 2023 and $13.61 million in 2024.

With these thresholds, most estates will not be subject to federal estate taxes anyway.

Although living trusts provide many estate planning benefits, they are not the best estate planning solution for everyone.

What should be considered prior to creating a living trust?


Trusts are more complex estate planning tools and tend to have higher initial setup costs than a last will and testament.

Although you may have a sense of “sticker shock” when receiving a quote for a living trust, you could be saving your loved ones on probate costs in the future.

When this is the case, the investment is worth the future reward.


Setting up a trust is more complicated than creating a last will and testament.


The grantor must take time to retitle and transfer ownership of assets to the trust.

This means the work is not all done when the document is signed.

You will have to coordinate with financial institutions and will likely need to complete additional paperwork.


Although you can still control the assets while you are the trustee, you will technically not be the owner of the assets in the trust.

This can be a mental roadblock for many.

Being comfortable with this arrangement is necessary for the proper functioning of the trust.

How can you tell if a living trust is right for you?

Similar to most items of clothing, a living trust is not one-size-fits-all solution.

You should discuss your situation and long-term goals with your experienced estate planning attorney to determine the best solution for your estate.

Prior to your consultation, you can also review this article from The Motley Fool titled “Is a Living Trust Really the Best Way to Pass an Inheritance to Your Family?,” for more information on the role of living trusts in estate planning.

What is the conclusion?

The benefits of living trusts are numerous and include flexibility, control of asset distribution, probate avoidance, possible tax savings, and incapacity planning.

The drawbacks include setup costs and complexity.

For questions about your personal plan, reach out to set up an initial consultation.

This post is for informational purposes only and does not provide legal advice. You should contact an attorney for advice concerning any particular issue or problem. Nothing herein creates an attorney-client relationship between the Law Offices of Kyle E. Krull, P.A., and the reader.

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