I often sit down with clients who believe they are not “wealthy enough” for a trust. They have a paid-off home in Brooklyn, a healthy retirement account, and savings built over a lifetime of work. They ask me, “Russel, what’s the magic number? A million? Five million?”
There is no magic number. The impulse to tie trust planning to a specific net worth is a common misconception. The prudent question is not about how much you have, but about what you want to happen to your assets and your family when you are no longer there to oversee things. A trust is a tool for control, privacy, and deliberate stewardship—goals not exclusive to the ultra-wealthy.
Beyond the Balance Sheet: The Real Reasons for a Trust
An estate plan is a set of instructions. A simple will is one form of instruction, but it has limitations. A will directs your assets through New York’s Surrogate’s Court in a process called probate. For many families, this is an acceptable path. For others, the time, expense, and public nature of probate are outcomes they wish to avoid.
Here, a trust becomes a powerful instrument. The primary driver for creating a trust is often not tax avoidance but probate avoidance. Any asset titled in the name of a properly funded revocable living trust passes outside the court’s purview. Your successor trustee can manage and distribute those assets according to your instructions without waiting for a judge’s approval. This is critical for a family that needs immediate access to liquid funds or for a business that cannot afford to be frozen during a lengthy court process.
Consider the ownership of real estate. If you own a home in Manhattan and a weekend property upstate, passing those assets through a will requires two separate probate-like proceedings. A trust consolidates ownership under a single entity, simplifying the administration of your estate for the person you choose to manage it.
Trusts for Control and Generational Stewardship
A will is a blunt instrument. It largely facilitates the transfer of assets in a lump sum. But what if a lump sum is not what is best for your beneficiaries? A trust demonstrates its true value in allowing for intentional, long-term control.
Perhaps you have a child not yet mature enough to handle a significant inheritance. Or you have a beneficiary with special needs who relies on government benefits that could be jeopardized by a direct inheritance. In these cases, we can structure a trust that provides for their care without disqualifying them from essential programs.
A trust allows you to be the architect of your legacy. You can instruct your trustee to distribute funds only when certain milestones are met—graduating from college, buying a first home, or starting a business. You can protect a child’s inheritance from being lost in a future divorce or to creditors. This is not about controlling from the grave; it is about providing a framework of support and extending your stewardship across generations. The person you name as trustee has a legal, fiduciary duty to carry out these specific instructions—a responsibility far more nuanced than simply writing a check.
When a Will Guarantees a Court Date
Many people are surprised to learn that having a will does not avoid probate. A will is essentially a letter to the Surrogate’s Court judge; its entire purpose is to be validated by the court. The process is governed by the Surrogate’s Court Procedure Act (SCPA). Specifically, SCPA Article 14 outlines the formal proceedings required to have a will admitted to probate.
This process makes your will—and by extension, a list of your assets and their recipients—a public record. Anyone can go to the courthouse and see the details of your estate. For families who value privacy, a trust is the only practical mechanism to keep these matters confidential. While probate in New York is not the ordeal it is in some other states, it still involves filing fees, potential delays, and the public airing of family affairs. For many of my clients, the decision comes down to a simple preference: Do you want your family to deal with a judge or with a trustee you appointed?
Is a Trust Right for Your Family?
A dollar figure is the wrong metric. Instead, I encourage clients to consider a trust if they find themselves in one of these situations:
- You own real estate, especially more than one property.
- You want to keep your family’s financial affairs private and out of public court records.
- You have minor children and want to name a custodian for their inheritance until they reach an age of your choosing.
- You have a beneficiary who has special needs, struggles with financial management, or is in a precarious marriage.
- You have a blended family and need to provide for a current spouse while preserving assets for children from a prior relationship.
If any of these describe your circumstances, the conversation should shift from “if” to “how.” A trust is an investment in order and intentionality. Stewardship.
The first step is not to begin drafting documents, but to gain clarity. If you are weighing these factors, a productive next step is to schedule a confidential review of your assets and family structure. In that meeting, we can determine whether the administrative costs of creating and funding a trust are justified by the control, privacy, and continuity it can provide for your family.
