It is very common for attorneys, financial gurus, and others to recommend a trust to everyone. Trusts are often recommended as a one-size fits all way to pass property to beneficiaries while avoiding probate. A revocable living trust is the most commonly recommended trust and it is genuinely a good instrument to pass property to your heirs and avoid probate. However, while a trust is a great tool to avoid probate, it is not always necessary to accomplish that goal and could overcomplicate things.
Whether you should have a trust depends on your assets and beneficiaries. If, like most people, your only assets are your house, car, 401k, bank account, brokerage account, and/or other retirement accounts, then you may not need a trust to pass your property to your beneficiaries without probate. Your house can be passed to your beneficiaries in the state of Florida using a lady bird deed (other states usually have some similar transfer on death deed), your car can be re-titled in the name of your beneficiary after you pass away without probate (make sure to identify who the beneficiary of your car is in your will), and a pay on death beneficiary can be listed on all your financial and retirement accounts.
I’ll usually recommend a trust to clients if they have minor children, disabled beneficiaries, they want to control when their beneficiaries inherit, or they have many assets and they want all their assets to be combined into one instrument that will avoid probate. If none of the foregoing apply, then I try to come up with simpler and more inexpensive alternatives.
A trust can be complicated. To have a trust, you need to consult an attorney to have your trust drafted, appoint a trustee and successor trustees, identify beneficiaries and split your property accordingly, amend the trust throughout your life, and the only way for your trust to become effective is to fund the trust (i.e., title your property in the name of the trust). I meet with clients who forget or do not know that their property needs to be titled in their trust for the property to actually be in their trust. This process can be confusing. I also meet with clients who do not know the terms of their trust and do not fully understand how their beneficiaries are inheriting their property. Some trusts are excessively and unnecessarily long, complicated, and expensive.
Overall, a trust is not a one-size fits all instrument, and it is often not necessary for the common person whose assets include one single-family home, a car, a retirement account, and a bank account. There are simple alternatives to a trust. A simple will, lady bird deed, and naming pay on death beneficiaries might be all that is needed to accomplish the goal of leaving property to beneficiaries while avoiding probate.