Do I really need a trust?

Many times, I have clients show up for an initial consultation with the mindset that “I need a trust.” They are absolutely dead-set that they must have a trust of some sort. When I ask why they believe they need one, sometimes I get a very well-thought-out response and the client is correct – they DO need a trust.

However, more often than not, the client believes he or she needs one because somebody else has told them that they need it. Upon digging further, it is generally because either that other person has a trust or because someone in that other person’s family passed away and had a trust.

Now, trusts are wonderful things — they can be used to do many things that a simple will cannot. And they are great for avoiding probates. But I rarely recommend them.

Why don’t I recommend them often? Well, first off, I believe in the KISS principle – the simple over the complex. I like to figure out what the simplest method is to accomplish a given goal, and oftentimes that means we can use a simple will along with some other non-probate transfer mechanisms to avoid probate.

So, if the state you reside in allows a Beneficiary Deed (aka “Transfer on Death Deed”), then you should take advantage of that. Thankfully, both Missouri and Kansas allow Beneficiary Deeds. A Beneficiary Deed goes a long, long way toward avoiding probate without a trust.

There are other non-probate transfer mechanisms that we routinely use that will allow us to avoid a trust.

The other thing to consider about trusts is that, like a pet, they require care and feeding – you can’t just form a trust and forget it. You must constantly exercise care to ensure that your property remains titled in the name of the trust. Oftentimes, people mess up and don’t keep things titled correctly, so despite having a trust, they end up in probate anyway.

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