Do You Really Need a Trust? A Realistic Assessment

Walk into most estate planning seminars in Chattanooga, and you'll leave convinced you absolutely MUST have a trust or your family will face financial ruin. It's good marketing. It's also often unnecessary.

Let me share something most estate planning attorneys won't tell you upfront: the majority of Tennessee families don't need a trust. A properly drafted will handles most situations just fine.

But some families do need trusts. Let's figure out which category you're in.

The Big Trust Myth: "Avoid Probate at All Costs!"

The primary sales pitch for trusts is "avoiding probate." And yes, a properly funded revocable living trust does avoid probate. But here's what they don't always mention:

Tennessee probate isn't the nightmare you've been told it is.

For straightforward estates in Tennessee:

• Timeline: 4-6 months (not years)
• Cost: $2,000-$7,500 typically (not $20,000-$30,000)
• Complexity: Manageable for most families
• Small estate option: Under $50,000 personal property can use simplified process

So while avoiding probate sounds great, the question is: what are you really avoiding?

When a Will Works Just Fine

A properly drafted will is sufficient when:

Your Estate is Straightforward

One or two properties, standard bank accounts, retirement accounts with named beneficiaries—this describes most families.

Your Heirs Get Along

If your kids can sit at Thanksgiving dinner without arguing, they'll probably handle your estate fine.

You're Under the Federal Estate Tax Threshold

That's $13.99 million for 2025. If you're not there, estate taxes aren't your concern.

You Don't Own Out-of-State Property

One property in Tennessee? Will works great. Properties in Tennessee, Florida, and Colorado? Now we're talking about potential multiple probates.

You Don't Have a Special Needs Family Member

No special circumstances requiring ongoing management of assets.

You Don't Own a Business

Business succession is a different ballgame and may require trust planning.

Will cost in Tennessee: $500-$1,500 for a comprehensive estate plan including will, power of attorney, and healthcare directive.

When You Might Actually Need a Trust

Now for the situations where trusts genuinely make sense:

1. You Own Real Estate in Multiple States

Here's where trusts shine. Without a trust, your heirs face probate in every state where you own property. A properly funded trust avoids this.

Example: Vacation home in Florida, rental in Georgia, primary residence in Tennessee = three separate probate proceedings without a trust. That's expensive and time-consuming.

2. You Have a Special Needs Family Member

A special needs trust protects government benefits while providing for your loved one. This is one scenario where a trust isn't optional—it's essential.

3. You Own a Significant Business

Business succession planning often requires trusts to ensure smooth transition, protect business value, and minimize tax implications.

4. You Have a Blended Family

Second marriages with kids from previous marriages can get complicated. A trust can ensure your spouse is cared for while protecting your children's inheritance.

5. You Have Creditor or Divorce Concerns

Certain types of trusts (not revocable living trusts) can provide asset protection from creditors or ex-spouses for your heirs.

6. Privacy is Critical

Probate is public record. If privacy is worth the extra cost, a trust keeps your affairs private.

7. You're Actually Wealthy

Large estates benefit from sophisticated trust planning for tax purposes, charitable giving, and generational wealth transfer.

Trust cost in Tennessee: $2,000-$5,000+ depending on complexity, plus annual maintenance if you use a corporate trustee.

The Hidden Costs of Trusts Nobody Mentions

Beyond the upfront attorney fees, trusts require:

Funding the Trust

Creating the trust document is only step one. You must transfer all assets into the trust—deeds for real estate, account retitling, changing beneficiaries. Miss something? That asset goes through probate anyway.

Ongoing Maintenance

Buy a new property? Must be titled in trust name. Open a new bank account? Into the trust. It's ongoing work.

Potential Tax Filing

While revocable living trusts don't require separate tax returns during your lifetime, certain trusts do. Add accountant fees.

Amendment Costs

Life changes? Trust amendments from attorneys cost $500-$1,500 each time.

What About Online Trust Services?

LegalZoom, Rocket Lawyer, and similar services offer trusts for $200-$500. Should you use them?

My straightforward take: you get what you pay for.

Online services provide forms, not counsel. They can't:

• Assess whether you actually need a trust
• Customize for Tennessee-specific issues
• Help you fund the trust properly
• Identify potential problems with your situation
• Provide ongoing support

For a simple will? Maybe worth considering. For a trust? I'd invest in proper legal counsel.

The Straight Answer

Do you need a trust? Here's my decision tree:

1. Are you over $13 million? Yes → Absolutely need sophisticated planning including trusts.
2. Do you own real estate in multiple states? Yes → Trust probably makes sense.
3. Do you have a special needs family member? Yes → Special needs trust is essential.
4. Do you own a significant business? Yes → Business succession trust likely needed.
5. None of the above? You probably don't need a trust. A comprehensive will-based estate plan works fine.

What You Actually Need (Trust or No Trust)

Whether you go with a will or trust, every Tennessee adult needs:

• Will or Trust: Direct asset distribution
• Durable Power of Attorney: Someone to manage finances if you're incapacitated
• Healthcare Power of Attorney: Medical decision-making authority
• Living Will: End-of-life care wishes

This complete package costs $500-$1,500 with a will, $2,000-$5,000 with a trust.

The Bottom Line

Trusts aren't bad. They're just often unnecessary for Tennessee families with straightforward situations.

If you're being pressured into a trust at an estate planning seminar, take a breath. Get a second opinion. Ask hard questions:

• Why do I specifically need this?
• What problems am I actually solving?
• What's the cost difference between a will and trust in my situation?
• What happens if I just do a will?

You deserve straight answers, not sales pitches.