Four Reasons Retirees Need a (Revocable) Trust
Just because an estate attorney or ad recommends a revocable trust doesn’t mean you actually need one. However, maybe one of the following situations applies to you.


Imagine walking into a car dealership and asking the salesperson whether you need a car. The salesperson would answer with assurance: “Of course you need a car! The only question is which one on our lot you are going to buy.”
Unfortunately, the same approach can be expected from a lot of estate attorneys. No matter who you are or what your situation, the attorney is very likely to tell you that you need a revocable trust. This is a one-size-fits-all answer, and you should proceed with caution. That said, a revocable trust often makes sense. Here are four reasons why a revocable trust may fit your situation:
1. To avoid probate
When prospective clients approach me, insisting they need a trust, it’s typically because of a good or bad experience they had because of a trust or lack thereof. Maybe a parent had a trust and things passed very smoothly. Or maybe their parents didn’t have a trust, and they had to deal with the probate courts in a tough jurisdiction. It’s either that, or they got a targeted ad on Facebook saying they should absolutely have one.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In any case, probate avoidance is a legitimate reason to set up a trust. If you plan to pass assets through your will, it will go through probate. Probate is a court-supervised process of distributing the decedent’s assets. It can be, depending on the jurisdiction, expensive and time-consuming.
If you own assets in multiple states, this can be especially important. My office is in Virginia, but from my office window, I can see D.C. and Maryland. If I own a rental property in Maryland and die, my family will go through probate here in Virginia and ancillary probate in Maryland. A revocable trust that owns both properties solves that problem.
2. To have control
Imagine a scenario where two of your kids are great with money, but the third, not so much. You can stop imagining, as this is probably the case. It is more common than not to have kids who are going to do very different things with the same inheritance.
The most common way that revocable trusts control this challenge is to release a certain percentage of assets once the beneficiary hits certain ages. While this is most common, it is by no means the only way to solve the problem.
Along with the benefit of control comes flexibility. The trust I have in place would allow for annual distributions only up to the amount that my beneficiaries save each year. What kind of financial planner would I be if I didn’t incentivize saving?
3. To ensure privacy
Putting together an estate plan can be a very emotional process. Ideally, there won’t be too much disagreement among the parties, and you will land with a plan that executes your wishes. That said, I’m guessing you wouldn’t post that plan on social media. Your wishes are typically something you keep private except from those who have some role or benefit in the plan.
If you plan to pass assets through a will, just remember that most of the time, that will becomes public once the probate estate is closed. So, if you left one of your kids out, left your favorite a bit more or are just a private person, you may be better off with a trust.
4. To plan for incapacity
The scenario that no one expects or wants does, unfortunately, occur sometimes. If your bank accounts are titled only in your name, this can become a nightmare for simple tasks like paying your bills. A revocable trust won’t improve your situation, but it can create continuity and simplicity in managing financial matters.
In the case of the trust, you will name a successor trustee who will manage the assets in the trust according to the terms of the trust should you become incapacitated. This can happen immediately rather than going through the legal process of seeking guardianship or conservatorship.
While I believe these are four very strong reasons for drawing up a living trust, and while most of our clients do employ these instruments, they are by no means necessary for everyone. My next column: Four Reasons You Don’t Need a (Revocable) Trust.
related content
- Eight Types of Trusts for Owners of High-Net-Worth Estates
- What Assets Should You Put (or Not Put) in Your Trust?
- The (Only) 3 Reasons You Should Have an Irrevocable Trust
- Three Key Things to Consider Before Agreeing to Be a Guardian in a Trust
- Best States for Trusts: How to Choose One That’s ‘Trust-Worthy’
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification. I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.
-
Ten Cheapest Places to Live in Texas
Property Tax Looking for a cheap place to live in Texas? Look no further. These counties have the lowest property tax bills in the Lone Star State.
-
AI Is Missing the Wisdom of Older Adults: What It Means for You
AI will increasingly affect your healthcare and finances, but young workers are primarily designing the systems and getting most of the jobs.
-
The Three C's to Financial Success: A Financial Planner's Guide to Build Wealth
Consistency, commitment and confidence in your chosen strategy are more critical to your financial success than finding the 'perfect' financial plan.
-
A Financial Adviser's Guide to Solving Your Retirement Puzzle: Five Key Pieces
If retirement's a puzzle you're struggling with, try answering these five questions. The answers will guide you toward a solution.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or Relocate
Homeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
What the HECM? Combine It With a QLAC and See What Happens
Combining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.
-
721 UPREIT DSTs: Real Estate Investing Expert Explores the Hidden Risks
Potential investors need to understand the crucial distinction between a REIT's option to buy a Delaware statutory trust's property and its obligation.
-
I'm an Insurance Expert: Yes, You Need Life Insurance Even if the Kids Are Grown and the House Is Paid Off
Life insurance isn't about you. It's about providing for loved ones and covering expenses after you're gone. Here are five key reasons to have it.