6 signs you need a trust

What is a living (or revocable) trust?

What happens after you die?

This is not an existential question, at least not for our purposes. (Talk to your spiritual advisor about those queries.) An important part of financial planning is controlling what happens to your assets once you’re gone. You want to ensure your money and valuables go to your loved ones and favorite charities—and do so without legal delays or fights over who gets what. Establishing a living trust is one way to avoid the lengthy public probate process and maintain some control over your legacy.

A living trust is a revocable trust established by an individual, known as the grantor, during their lifetime to protect their assets and direct how they’re distributed at their death. The grantor decides which assets are put into the trust and generally continues to manage them as trustee, although they can also name someone else as trustee. The trustee can change or revoke the trust at any time. And should the grantor ever become incapacitated, a successor trustee, preselected by the grantor, is empowered to pay bills and make other financial decisions on the grantor’s behalf.

There’s an element of tax planning that comes with establishing most trusts, but they are a crucial piece of estate planning for a host of other reasons. Here are six signs a living trust could be right for you.

1. You have sizeable and complex assets.

For those who have accumulated significant assets—or for assets more complex in nature, such as business interests, valuable collectibles, or real estate—a trust can provide a structured way to manage and protect these assets.

There are many kinds of trusts for special situations, but a living trust offers the most flexibility. “A living trust is a potential solution where clients want a single architecture for lifetime planning, incapacity planning, and tax and asset control following death,” says Joseph Nienaber, a TIAA wealth planning strategist. This makes it an ideal tool for managing substantial and complex assets.

2. You want to avoid probate.

One of the primary advantages of establishing a living trust is the ability to bypass the probate process. Probate is the legal procedure through which a deceased person’s estate is distributed, and it can be both time-consuming and public. With few exceptions, states require a probate court process for decedents with just a will. These laws and length of process vary from state to state. For example, small estates, those with less than a state-specific threshold value of assets, can avoid probate in some cases. But by designating a trustee to manage and distribute your assets according to your instructions, a living trust ensures a smoother and more private transfer of your estate assets. This means your heirs can receive their inheritances more quickly and without the added stress of navigating the probate court system.

3. You have people who depend on you financially.

If you’re financially responsible for family members, a trust can help ensure their needs are met without interruption. Trusts can also support unmet education funding needs or even a family business startup. By specifying how and when assets are distributed, trusts allow you to support your beneficiaries according to your wishes. “Clients who have a clear picture of their retirement assets and understand their adult children’s future financial needs are particularly well-positioned to consider establishing a trust," Nienaber says.

4. You want a plan in case you become incapacitated.

If declining health or cognitive abilities impair your ability to manage your finances, a trust ensures a designated trustee can take over managing your assets without court intervention. This continuity is crucial for maintaining financial stability and easing some tension during what can be a very challenging time for you and your family.

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5. You value privacy.

Unlike wills, which become public documents during probate, trusts remain private. This confidentiality is essential for people who prefer to keep their estate details and beneficiary information out of the public eye. A trust ensures your financial affairs remain discreet, providing an added layer of privacy for your family.

6. You want to establish a legacy.

A living trust allows you to create a lasting legacy by structuring tax-advantaged charitable gifts or other philanthropic activities. Whether you line up behind charitable causes or leave a meaningful inheritance to your descendants, a trust provides the framework to ensure your legacy aligns with your values and wishes.

When considering a trust, here’s what to keep in mind.

Although establishing a living trust involves additional upfront costs—and does not replace a will, which is still necessary—its benefits typically outweigh the initial investment. A living trust helps navigate delicate family dynamics, addresses unique financial considerations in your estate plan, and eases the burden on loved ones during an emotionally challenging time. It offers a comprehensive solution for lifetime planning and asset protection, ensuring your legacy unfolds according to your wishes.

Take the next step.

If you recognize any of these signs in your situation, it might be time to consider establishing a living trust. Start by reaching out to your TIAA Wealth Management advisor, who can help you determine your estate-planning needs. Don’t have an advisor yet? Schedule an appointment to get personalized guidance.

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