Trusts

In detail

How a living trust works

You (the grantor) create the trust document, transfer property into the trust, and typically serve as your own trustee while you are able — so day-to-day life barely changes. You name a successor trustee to take over if you become incapacitated or die, and the trust says who receives what, and when.

Because the trust — not you personally — owns the property, those assets generally do not go through probate at death. The successor trustee distributes or manages them according to your instructions, usually faster and more privately than probate.

What trusts do well — and what they don't

Trusts excel at avoiding probate, providing for incapacity management without court involvement, and controlling how and when beneficiaries receive property (for example, staggered distributions to young heirs). Specialized trusts can provide for a spouse while preserving assets, or support a person with disabilities without disqualifying them from benefits.

Trusts do not inherently save taxes for most families, do not protect assets from your own creditors while revocable, and do not help with Medicaid eligibility — in fact, assets in a revocable trust still count for Medicaid. Claims that a living trust is a complete substitute for all other planning should be treated skeptically.

Costs and the funding step everyone forgets

A trust typically costs more to set up than a will, because the document is longer and property must be retitled into the trust — deeds recorded, accounts renamed. The most common trust failure is skipping this funding step: the beautiful binder sits on a shelf while the house and accounts remain in individual names, so probate happens anyway.

Ask any attorney you consult exactly what funding assistance is included, and get a written list of which assets should be transferred. Review the trust after moves, refinances, and major purchases, which can inadvertently pull property back out of the trust.

How this varies by state

Trust rules come from state law. Common variations:

• How trusts are treated for state Medicaid eligibility and estate recovery.
• Creditor protections for different trust types.
• Recording and titling requirements for real estate held in trust.
• Whether the state has its own estate or inheritance tax affecting trust planning.

Trust law is state law. The concepts below are general; funding rules, creditor protections, and Medicaid treatment vary by state.

We publish state-specific pages only where we have genuinely verified content. Our verified state page is Florida.

• Florida — senior legal information

Who may need help with this

• Homeowners wanting to avoid probate
• Couples coordinating property for a surviving spouse
• Parents planning for a child with disabilities (special-needs trusts)
• People with property in more than one state
• Anyone who has a trust but never funded it

Common mistakes

• Creating a trust and never transferring property into it.
• Assuming a revocable trust protects assets from creditors or helps qualify for Medicaid.
• Refinancing or moving without checking trust titling.
• Naming a trustee without discussing the job with them.

Questions to ask

• Do I actually need a trust, or would a will plus beneficiary designations do?
• What is included in your fee — especially funding assistance?
• Which of my assets should go into the trust, and which should not?
• How does this trust interact with Medicaid rules in my state?
• What happens if I move to another state?

Official resources

These links go to government agencies and established nonprofit organizations — not to advertisers. External links open in a new tab.

• LawHelp.org — Pro Bono Net

  Free legal aid directory by state.

• Eldercare Locator — Administration for Community Living

  Local aging services, including legal assistance programs.