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Trusts: The Pros & Cons

Updated: Dec 7, 2022

You’ve heard all about trusts on this blog, but choosing whether one is right for you can be a difficult decision (hint, hint - consulting a qualified attorney is always a great idea!).

If you’ve been considering a trust, you may have been falling down the internet rabbit hole to try and search. It can be a lot! While I certainly won’t be able to answer every question on my blog, I sure try to lay out the basics.

So what are the pros and cons of a trust? For the basis of today’s post, I’m going to focus on a specific type of trust known as a revocable living trust.

A quick recap.

For a quick review–a revocable living trust, also sometimes referred to as simply a living trust, is a trust created during your lifetime that can be changed during your lifetime.

A trust IS a legal document, and it’s important to have one correctly drafted to comply with legal requirements and to achieve what you actually want it to achieve

To create a revocable living trust, a person (the grantor) signs a trust agreement naming a trustee to manage the trust. Often, if you are creating the trust you may choose to act as trustee during your lifetime. A trustee can be an individual person, more than one person acting jointly, and/or another entity (like a professional trustee or corporation).

The trust is typically set up to manage the property for benefit of the grantor (during their lifetime) and their beneficiaries (after the grantor has passed away). Also, generally speaking, as grantor you still retain rights to your property while you’re alive. These rights can include keeping the property, giving away the property, letting someone else use the property, making changes to the trust, and so on. (A quick note–”property” doesn’t have to mean real estate. It can also refer to money, investments, and so on.)

Once all grantors have passed away, the trust then determines how the property would be distributed to the beneficiaries (similar to a will, but not quite the same).

First, the pros.

1. Avoiding Probate

This one is huge, and it’s the main reason that many people choose a trust.

For a quick refresher on probate, check out this post. In a nutshell, probate (as we’re referring to it here) is the court process used after an individual has passed away to distribute that person’s assets (and debts). If you only have a will, your will must go through probate. While this isn’t a post about the pros/cons of probate, most people seek to avoid it for a few main reasons: it’s public, it can be expensive, and it’s definitely time-consuming. A trust allows any assets that are properly in the trust to skip probate, saving your family time, money, and maintaining their privacy. Amazing, huh?

2. Immediate Access to Assets

This pro follows closely behind #1. Unlike with a will, which ties up assets in probate for the duration of that process, assets in a living trust are available immediately after death. This means your trustee/family can use those assets to pay final expenses, outstanding debts, estate taxes, and administration expenses–all without waiting for the probate process. As mentioned above, this does require the property to already be in the trust (more on this below).

3. Ease of Use

I’m wrapping a lot into this one, but here’s what I mean by ease of use. First, unlike a will, you do not need to submit an original signed version to the court (wills must be submitted in order to be probated). Second, a revocable living trust can be a bit easier to change than a will, which oftentimes requires a bit more formality to rescind. Third, a trust allows a bit more flexibility than a will. For example, if you have out-of-state family who will be acting on your behalf after you pass, they CAN act as your trustee, but they may face some difficulties acting as your personal representative for a probate process.

4. Incapacity/Disability Plan Already Built-In

It’s not something we like to think about, but the fact remains that there’s always a chance that we may become either physically or mentally incapacitated. If we can’t manage our affairs, who will?

While a financial power of attorney is a great step to help with many of these, a trust will have a built-in backup solution for if you become incapacitated. Together with the power of attorney, you’ve got a rock-solid plan to ensure continuity in your finances, property management, and more . . . without the red-tape of going to court for a guardianship.

5. More Control Over Distribution

You’ve heard the stories (“no money until you’re married by 35!” – wait, isn’t that a movie?). A trust can specify how, when, and what assets go to your beneficiaries. I don’t mean that you have to be super controlling and have a million requirements and off-the-wall demands.

But, for example, being able to specify that your minor children won’t receive all their money at age 18? That’s a super pro in my book.

A trust spells out for your trustee how the money is to be paid out (All at once? In phases? In annual payments? etc.), when (A certain age? A milestone, like buying a house or graduating from college? etc.), and still allows you to specify who gets what like a will. A trust can also have important provisions that allow your trustee to use their discretion to NOT immediately payout to a beneficiary, such as in the case of a beneficiary experiencing substance abuse issues (and can even specify that funds can be used to support their treatment). Mind = Blown, huh?

Now, the cons.

I know I’ve been singing the praises of revocable living trusts (and they are pretty fabulous), but there are some drawbacks.

1. The Funding Process

After you create a trust, it must be funded to operate properly. “Funding” is the process by which assets are re-titled into the trust. For example, you may change the beneficiary on your life insurance to the name of the trust, or you may execute a beneficiary deed to have your home go into the trust after you die. It’s not terribly complicated, but it can be time-consuming.

While funding is a “con” because it doesn’t apply with will-based estate plans, it’s not horrible avoid-at-all-costs kind of thing. In fact, there are significant similarities to the process that your family would need to go through after a probate; in this case, you’re just handling it up front for them.

Forgot to transfer something? A type of will called a “pour-over will” ensures that after the probate process, those remaining assets will transfer to your trust.

(Don’t worry, if you choose to use Emerald Law for your trust creation, we offer funding support services too.)

2. Complexity

Trusts can be a bit more involved than a will (because of all the awesome pros listed above) and should really be drafted by a qualified attorney. While there can be an increase in upfront costs compared to the creation of a will, this can save oodles of money that would be spent on the probate process.

Bottom line: Have an expert in your corner and you’re good to go.

3. Flexible and Adaptable

Revocable living trusts are not set in stone. You can change them! And in some cases, it may be easier than modifying a will. In fact, there are times when you should change your trust so that it always reflects your current life situation (e.g., married/divorced, etc.).


That was fun, huh? Trusts can do some amazing things, but they do require some careful planning and funding to operate as intended.

Tara Kpere-Daibo

Wanna learn more? I’m happy to chat. You can reach out to me here. You may also choose to sign up for a FREE virtual consultation here. I look forward to hearing from you!



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