Recent survey data indicate that a majority of U.S. adults lack core estate documents. According to the 2025 Wills and Estate Planning Study, only 24% report having a will, implying that most households do not have basic estate planning in place. Many assume that a simple will is enough, but in practice, settling an estate through probate can take months—or even years—and expose personal details to the public record.

This is where a living trust can make a difference. Far from being just a tool for the ultra-wealthy, it can streamline asset distribution, reduce court involvement, and give families greater peace of mind.

Key Takeaways

• A living trust can help avoid probate, speeding up distribution and protecting privacy.
• Revocable trusts allow flexibility during life; irrevocable trusts lock in terms but may offer tax or creditor benefits.
• Funding the trust properly is essential—unfunded trusts often fail.
• Even those with modest estates may find value in reducing court involvement and ensuring clear instructions.
• Trusts work alongside, not instead of, wills for a comprehensive estate plan.

What Is a Living Trust?

A living trust is a legal arrangement where a trustee holds and manages assets for beneficiaries, according to terms set by the person who created it (the grantor). Unlike a will, which only takes effect after death, a living trust operates during a person’s lifetime and continues after.

The core benefit is that assets placed into the trust bypass probate court—a process that can be costly, time-consuming, and public. This means heirs may gain quicker access to property or funds, without lengthy legal delays.

Revocable vs. Irrevocable Trusts

There are two primary types of living trusts:

• Revocable living trust – The grantor can modify, add, or remove assets at any time. This flexibility makes it the most common option for families who want control during life.
• Irrevocable living trust – Once established, changes are very limited. Some people consider these for potential tax advantages or creditor protection, but they require giving up control.

So what? Choosing the right type depends on whether control or protection is the priority.

Who Should Consider a Living Trust?

Living trusts are often associated with large estates, but they can benefit many families. Common scenarios include:

• Avoiding probate – Especially valuable in states where probate is lengthy or expensive.
• Ensuring privacy – Wills become public record, but trusts remain private.
• Managing out-of-state property – A trust can simplify the transfer of real estate located in different states.
• Providing for dependents – Parents may want a trustee to manage funds for minor children until they reach a set age.

Hypothetical: Imagine a 40-year-old parent with a house, a retirement account, and two children. A living trust could direct how those assets are used for the children’s education and care without court oversight.

How to Set Up and Fund a Living Trust

The trust document itself is only half the equation. To be effective, assets must be retitled into the trust’s name—a step many overlook. For example:

• Bank accounts need to be retitled or assigned to the trust.
• Real estate deeds must be updated.
• Beneficiary designations on retirement accounts should be reviewed for alignment.

Without funding, the trust may not cover the intended assets, forcing some property back into probate.

Common Pitfalls to Avoid

Even well-structured trusts can fail if mistakes occur:

• Not funding the trust – The most frequent oversight.
• Letting it go stale – Life changes such as marriage, divorce, or new children may require updates.
• Assuming it replaces a will – A “pour-over will” is usually still needed to capture assets inadvertently left out.

A living trust is less about wealth and more about control. For many families, the ability to ensure smooth, private, and timely transfer of assets is the most valuable benefit. The key is not just creating trust, but keeping it current and properly funded.