Do I Need a Trust If I Have a Small Estate?

Estate planning isn’t just for the wealthy—it’s for everyone who wants to protect their family, assets, and future. Many people assume that trusts are only necessary for large or complex estates, but that’s not the case. Even those with smaller estates in Jacksonville and surrounding communities such as St. Augustine can benefit from a well-structured trust.

In this article, we’ll explore why a trust might be the right choice for your estate, regardless of its size, and how it can help you avoid common pitfalls like probate and incapacity issues.

What Is a Trust?

A trust is a legal arrangement where a trustee manages assets on behalf of beneficiaries. Unlike a will, a trust can take effect while you are still alive, helping to manage and distribute your assets smoothly. Trusts come in many forms, but the most common for estate planning purposes are revocable living trusts and irrevocable trusts.

Why Consider a Trust for a Smaller Estate?

Many people believe that if their estate is modest, a trust isn’t necessary. However, a trust can offer significant advantages regardless of your asset level, explains Estate Planning Attorney Bill O’Leary in his video.

Below are some of the main reasons why a trust may be a smart choice for St. Augustine residents.

Avoiding Florida Probate

One of the biggest benefits of a trust is that it allows your loved ones to avoid probate—a court-supervised process for distributing your assets after you pass away. Probate can be costly, time-consuming, and public. In Florida, even small estates often have to go through probate, and attorney fees are based on a percentage of the estate’s value. A trust helps your heirs receive their inheritance faster and with fewer legal complications.

Ensuring Direct Asset Distribution

A trust allows you to dictate exactly how your assets are distributed. Whether you want to provide for minor children, set conditions for inheritance, or ensure a smooth transfer of property, a trust gives you the flexibility to do so.

Managing Key Assets

Even a modest estate may include assets that benefit from a trust. For example, if you own a home in St. Augustine, placing it in a trust can simplify the transfer to your heirs. A trust can also be useful for managing small businesses, retirement accounts, or other valuable assets.

Planning for Incapacity

If you become incapacitated due to illness or injury, a trust ensures that a trusted person manages your finances without the need for court intervention. Unlike a power of attorney, which some financial institutions may refuse to honor, a properly structured trust gives your trustee immediate authority to manage your assets. Read more in our article, How to Plan for Incapacity in Florida

Potential Tax Benefits

Although smaller estates often don’t face federal estate taxes, a trust may still provide tax advantages in certain situations. Consulting a Jacksonville and St. Augustine estate planning attorney can help determine whether tax savings apply to your specific case.

Trusts vs. Wills: Which Is Right for You?

While wills and trusts both play essential roles in estate planning, they serve different purposes.

• Wills: A will takes effect only after your death and must go through probate. It is a useful tool for naming guardians for minor children and specifying funeral wishes.
• Trusts: A trust takes effect immediately, allowing you to manage your assets during your lifetime and provide for a smooth transition upon your death or incapacity.

For many Jacksonville and St. Augustine residents, a combination of both a will and a trust offers the most comprehensive protection.

How to Set Up a Trust in Jacksonville and St. Augustine

If you’re considering setting up a trust, it’s essential to work with an experienced estate planning attorney. Here’s what the process typically involves:

1. Identify Your Goals – Determine what you want to achieve with your trust, such as avoiding probate, protecting assets, or planning for incapacity.
2. Choose a Trustee – Select a responsible person or institution to manage the trust according to your wishes.
3. Draft the Trust Document – An attorney will help create a legal document outlining the trust’s terms.
4. Fund the Trust – Transfer ownership of key assets (like real estate, bank accounts, or investments) into the trust’s name.
5. Maintain and Update the Trust – Periodically review and update your trust to reflect any changes in your circumstances or the law.

Work with a Trusted Estate Planning Attorney

Every family’s situation is unique, which is why estate planning should never be a one-size-fits-all approach. At Legacy Planning Law Group, we craft customized estate plans for families in Jacksonville, St. Augustine and surrounding areas.

If you’re unsure whether a trust is right for your estate, we can help you understand your options and create a plan tailored to your needs.  Schedule a Discovery Call with Team Legacy to discuss your estate planning goals.

Reference: Charles Schwab (Oct. 19, 2023) “We Asked Our Experts: Do You Need a Trust?”