Estate planning isn’t a topic most people enjoy discussing. It’s understandable—thinking about the future and what happens to your loved ones when you’re gone isn’t easy. However, planning is a critical part of a comprehensive financial strategy.
When it comes to Trusts, we often hear the same misconceptions from clients, friends, and family. Many people assume Trusts are only for the ultra-wealthy or that they won’t benefit from having one. Trusts can be a valuable tool for a wide range of individuals. Here, we break down six common misunderstandings to help bring clarity to the conversation.
Misconception #1: “Trusts are only for the ultra-wealthy.”
Many believe that Trusts are only necessary for the very wealthy—but that’s not the case. Trusts can serve several important functions, including:
- Minimizing probate, which is the court process of distributing assets after death.
- Protecting assets from potential creditors or lawsuits (depending on the type of Trust).
- Ensuring assets are distributed according to your wishes—not just immediately after death, but over time.
Regardless of wealth, a Trust can provide structure, privacy, and efficiency in managing your estate.
Misconception #2: “I have a will, so I don’t need a Trust.”
Wills and Trusts serve different purposes. While both can outline how assets are distributed, a will alone doesn’t avoid probate, which can be a time-consuming and costly process.
A Trust, on the other hand, allows for:
- Avoiding probate, meaning assets can be transferred more efficiently.
- Privacy, since Trusts are not public record like wills.
- Control over distributions, including managing assets during your lifetime and beyond.
For many, using a Trust alongside a will creates a more complete estate plan.
Misconception #3: “Trusts are too expensive to set up.”
While setting up a Trust does involve some upfront legal costs, the long-term benefits often outweigh the initial expense. A Trust can help:
- Avoid probate fees.
- Simplify the transfer of assets.
- Provide long-term protection for beneficiaries.
For many families, the cost of not having a Trust—such as legal fees and delays in settling an estate—can be far greater.
Misconception #4: “If I put assets in a Trust, I lose control over them.”
Not all Trusts require you to give up control of your assets. A Revocable Living Trust, for example, allows you to remain in full control during your lifetime.
As both the Grantor (the person who creates and funds the Trust) and the Trustee (the person managing it), you retain the ability to:
- Access your assets at any time.
- Make changes to the Trust as needed.
- Dissolve the Trust if your circumstances change.
This flexibility makes Revocable Living Trusts a popular choice for estate planning.
Misconception #5: “I’m too young to need a Trust.”
Trusts aren’t just for retirees. In fact, younger families may find them even more beneficial.
If you have minor children, family members with special needs, or significant assets, a Trust can:
- Ensure your children’s inheritance is managed responsibly.
- Provide for loved ones who may need long-term support.
- Help your estate avoid probate, reducing stress for your family.
Estate planning isn’t about age—it’s about making sure your wishes are carried out, no matter what.
Misconception #6: “I already have a Trust, so my estate plan is complete.”
A Trust is an important tool, but it’s not a comprehensive estate plan on its own. A well-rounded estate plan should also include:
- A will, for naming guardians if you have minor children.
- Powers of attorney, for financial and healthcare decisions.
- Healthcare directives, to ensure your medical wishes are followed.
Regularly reviewing and updating your estate plan is just as important as having one in place.
Final Thoughts
These misconceptions are understandable, but the truth is that Trusts can provide valuable benefits for many individuals and families—not just the ultra-wealthy.
If you’re unsure about whether a Trust is right for you, your Freestone Client Advisor team can help. We work closely with estate planning professionals to ensure your plan aligns with your goals, providing clarity and confidence for the future.
Important Disclosures: This article is not intended to provide, and you should not rely upon it for accounting, legal, tax or investment advice or recommendations. We are not making any specific recommendations regarding any financial planning, investment or tax strategy, and you should not make any financial planning, investment or tax decisions based on the information in this article. This article is intended to be educational in nature and to discuss a few limited aspects of very complex legislation or other complex subject matters. This article is not a comprehensive or complete summary of considerations regarding its subject matter. We recognize that every individual has different needs and the opinions expressed in this article may not be appropriate for everyone. Please consult with a Freestone client advisor, accountant, or lawyer regarding options specific to your needs. Please note that Freestone does not approve or endorse any third-party content hyperlinked to in this article.
About the Author: Eric Fridstein, CFP®
Eric joined Freestone in 2020 after serving as a Financial Services Representative at D.A. Davidson, where he managed and maintained investment accounts for thousands of clients across the country. At Freestone, he spent four years collaborating with a senior partner to address diverse client needs, including financial planning and investment allocation. Now managing his own client base, Eric is passionate about solving complex financial challenges and is dedicated to providing clients with exceptional, thoughtful service—both proactively and reactively.