What Is a Trust and When Do You Need One?

Estate planning is ensuring the people you care about are cared for without unnecessary stress, court battles, or confusion. Trusts are one of the best ways to accomplish this. Depending on the type, a trust can keep your estate out of probate, protect assets, or make sure a loved one with disabilities doesn’t lose government benefits.

Revocable (Living) Trust

A revocable trust is the most flexible option. While you're alive, it’s yours to manage—you can add or remove assets, change the terms, or even dissolve it if you want. The real benefits kick in later: when you pass away, your assets skip probate court, meaning your family avoids months (or years) of legal headaches.

If you ever become unable to manage your finances, a revocable trust also ensures someone you trust can step in without needing court approval. Unfortunately, it usually doesn’t protect assets from creditors or on its own reduce estate taxes. Since you still have control, those assets are legally still yours.

Irrevocable Trust

An irrevocable trust is the opposite of revocable: once you set it up, you can’t easily change it. That sounds extreme, but there’s a reason for it. Because the assets technically aren’t yours anymore, they can be protected from lawsuits, creditors, or estate taxes in certain cases.

This type of trust is useful for asset protection and tax planning. But here’s the trade-off: you’re giving up control. It’s a bigger commitment, but for some, the benefits outweigh the downsides.  Irrevocable trusts are often used as a tool to protect assets against the cost of long term care, or as a part of strategies to reduce or avoid estate taxes.

Special Needs Trust

If you have a child or family member with disabilities, leaving them money directly at your death could accidentally make them ineligible for government benefits like Medicaid or Supplemental Security Income (SSI). A special needs trust avoids this problem.

Instead of giving them money directly, the trust holds and manages the assets, allowing them to get financial support without losing essential benefits. The funds can be used for medical expenses, therapies, education, or entertainment—Things that improve their quality of life while keeping their public benefits intact.

What to Think About When Setting Up a Trust

Who’s Managing It? - A trust is only as good as the person in charge. The trustee can be a family member, but in some cases (especially with more complex trusts) a professional trustee or trust company might be a better choice.

Did You Actually Transfer Your Assets? - A trust doesn’t do anything unless your assets are in it. That means retitling property, bank accounts, and investments into the trust’s name. A surprising number of people set up a trust and then forget this step, leaving their assets vulnerable to probate. 

How Much Control Do You Want? - If keeping full control is important, a revocable trust makes sense. If asset protection or tax benefits matter more, an irrevocable trust might be the better option.

Let’s Make Your Estate Plan Make Sense



Trusts don’t have to be intimidating or complicated; we’re here to help you find the right fit for your situation. If you're unsure which one makes the most sense for you, let’s talk. Call McGrath Law Office, P.C. at 309-359-3461 (Mackinaw) or 309-266-6211 (Morton)—we’ll walk you through it in plain English.