Disinheriting a Child, Getting a Living Trust

Family Finances

Disinheriting a Child and Other Good Reasons to Get a Living Trust

Assets placed in a living trust go directly to your heirs when you die, bypassing probate.


A living trust is more expensive to set up than a simple will, and not everyone needs one. But a revocable living trust can be a valuable estate-planning tool for people with fractious families, a complex estate or property in more than one state.

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Assets placed in a living trust go directly to your heirs when you die, bypassing probate. Promoters of living trusts often play up this advantage because probate can be lengthy and costly. But some of your assets will bypass probate automatically. Property that is jointly owned with the right of survivorship goes directly to the survivor. Pensions, IRAs, most life insurance death benefits, government bonds and bank accounts with a designated pay-on-death beneficiary also go directly to the named beneficiary. If that describes most of your assets, you probably don’t need a living trust. However, if you own a vacation home or other property in another state, you may need a living trust to avoid having to go through probate in two states.

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A living trust is also a good idea if you plan to disinherit one of your children or leave unequal amounts to your heirs, says Danielle Mayoras, an elder-law lawyer and coauthor of Trial and Heirs: Famous Fortune Fights. If your estate goes through probate, your heirs will have the opportunity to appear in court and contest the terms of the will, she says. Plus, your estate and any challenges will be part of the public record. “Even if you’re not a celebrity, you may not want nosy neighbors knowing what you have and who you’re leaving your money to,” Mayoras says.


How it works. With a living trust, you normally name yourself trustee and retain the authority to manage property in the trust. You must also name a successor trustee (often your spouse, an adult child or trusted friend) to handle the distribution of assets after you die. Although heirs and beneficiaries will be notified, it’s more difficult to dispute the terms of a living trust than a will, Mayoras says. And you can include a provision that disinherits anyone who challenges your wishes.

Even if you have a living trust, you’ll still need to write a will. Otherwise, any assets not included in the trust will be distributed by your state’s intestacy laws. A “pour over” will ensures that anything not included in the trust will be added to the trust at the time of your death. Those assets will still have to go through probate.

After you’ve established a living trust, you must transfer property to the trust. For example, if you want your home (or homes) to be included, you must record a new deed transferring ownership to the trust. If you overlook this step, the trust is worthless. You should also revisit the terms of the trust every three to five years, Mayoras says. You may need to update it to account for property you’ve acquired since you established the trust, or changes in your family situation.

The cost to set up a living trust varies depending on where you live, but it typically ranges from $1,000 to $1,500 for an individual or $1,200 to $2,500 for a married couple. If you’ve decided you need one, hire an experienced estate-planning lawyer. Beware of invitations to a “free” lunch or dinner from people who claim to be experts in estate planning and living trusts. In a consumer advisory, Minnesota Attorney General Lori Swanson says that such promotions are often orchestrated by insurance agents who use living trusts as a pretext to sell other products, such as annuities. The trusts they promote typically cost more than $2,000, even though they’re boilerplate documents that don’t take an individual’s estate plans into account, Swanson warns. And they may not reflect the laws of your state.