Isn't That Rich Podcast

If you've ever broken into a cold sweat after finding out you were named in a trust—or if you're just the kind of person who wants to avoid a financial mess down the line—this post is for you.

We sat down with Evan Taylor, an attorney and partner at Lawler Brown Law Firm in Marion, IL, who doesn’t just draft legal documents; he crafts peace of mind. Evan’s an expert in estate planning, probate, and real estate law, and he’s the kind of person who makes even the most complex legal topics feel like common sense. You might remember him from our 2023 Legacy Sessions event. This time, he joined us to answer one of life’s most grown-up questions: what exactly happens when someone leaves you a trust?

Turns out, a trust isn’t just something rich people set up when they’re bored or worried about their legacy. It’s a powerful estate planning tool that can protect your privacy, save your loved ones from legal nightmares, and ensure your wishes are actually followed after you’re gone.

What Even Is a Trust?

So, what is a trust, really? According to Evan, a trust is a legal arrangement involving three key people: the grantor (who creates the trust), the trustee (who manages it), and the beneficiary (who benefits from it). Think of it like a legal relay race—except instead of passing a baton, you’re passing houses, money, and heirloom china.

Unlike a will, which only takes effect after you die and requires court approval through a public process called probate, a trust can be active while you’re still alive. That means you can move assets into the trust ahead of time, skip the courthouse drama, and keep your family’s business off the public record.

A Real-Life Example from Evan

Evan gave us a peek into how he and his wife personally use a trust. They have a joint revocable trust that names them as the grantors, trustees, and current beneficiaries. If something were to happen to them, their two daughters would become beneficiaries—but not right away. Instead of handing over a lump sum at 18 or 21 (cue the shopping spree), their trust distributes funds for their daughters’ education, health, and general well-being until they’re older and (hopefully) wiser. Half comes at age 25, and the remainder at 30.

Trust vs. Will: What’s the Difference?

If Evan and his wife had only created a will, that kind of structure would be a lot harder to pull off. Wills go through probate, which is public, time-consuming, and often expensive. And yes—people could literally read in the newspaper how much money your family has and who’s getting it. Trusts, on the other hand, let you control the narrative. You can structure who gets what, when, and how—without a judge ever needing to step in.

You Don’t Have to Be Rich to Need a Trust

One of the most common misconceptions Evan hears is that trusts are only for the wealthy. Not true. Whether you have a modest savings account or a house you want to stay in the family, a trust can help make sure your wishes are honored without delay or dispute. In fact, Evan says he sets up trusts for most of his clients, not because they’re millionaires, but because they want clarity, protection, and a smooth transition for their loved ones.

Revocable vs. Irrevocable Trusts

Now, let’s talk about the two main types: revocable and irrevocable trusts. A revocable trust—like the one Evan has—is flexible. You can update, amend, or even completely cancel it while you're alive. But once the grantor dies, it locks into place and becomes irrevocable. Irrevocable trusts, on the other hand, are set in stone from the start. They’re typically used in very specific situations, like Medicaid planning or estate tax strategy, where someone wants to shield their assets in advance.

You Must Fund the Trust

No matter which type of trust you choose, there's one major mistake people often make: failing to fund the trust. Evan compares this to building a beautiful new home and never moving into it. You can draft the perfect trust document, but if you don’t actually move your assets into the trust—or at least name the trust as a beneficiary—your heirs could still end up in probate court, scratching their heads.

What Should Go in a Trust?

Real estate is one of the easiest things to fund into a trust—you simply change the deed. Bank accounts, life insurance policies, and investment accounts can also be added or have their beneficiary designations changed to the trust. Retirement accounts like 401(k)s are trickier; they’re considered tax-qualified, and moving them outright into a trust can trigger major taxes. Instead, it’s smarter to name the trust as the beneficiary so the account flows into the trust after death.

So You’ve Been Left a Trust—Now What?

If you’ve been named as a trust beneficiary, first—congrats. Second, get a copy of the trust document. Then, ask the trustee for an inventory of what’s in it. That’s crucial to understanding what’s coming your way and when. Trustees are legally required to provide that information, but if they don’t—or take forever—you’ll want to bring in a lawyer sooner than later. Don’t wait years. Evan’s seen people come to him after 10+ years in the dark, and by then, there’s often little he can do to undo the damage.

Being a Trustee: It’s a Job (Not Just an Honor)

Trustees aren’t just there for their good looks. They’re legally obligated to uphold the terms of the trust, manage assets prudently, and report back to beneficiaries. Many people don’t realize that trustees can be paid for their work—especially if they’re managing a trust for years. Evan advises tracking time and getting legal guidance if things get complicated.

How Trusts Handle Real Estate

If real estate is involved, the trust can dictate what happens to it—or leave it up to the trustee to decide based on what’s best for the beneficiaries. Sometimes that means selling, sometimes renting, sometimes keeping the property for a guardian to live in with the kids. And yes, even if the home has a mortgage, it can still be placed in the trust. But the trustee will have to deal with that debt.

Income vs. Residual Beneficiaries

Not all beneficiaries are treated equally. Evan explained the difference between income beneficiaries (who receive earnings from the trust during their lifetime) and residual beneficiaries (who get whatever’s left after the trust ends). This setup is especially helpful in blended families, where one spouse might want to support their partner after death—but still make sure their own children receive something later.

Can a Trust Be Contested?

Technically, yes. But it’s very hard to do—and if the trust includes a no-contest clause (which most do), you could be cut out completely for trying. If you're getting nothing and have legitimate concerns about coercion or mental capacity, speak with a lawyer. But if you're just unhappy with your share, be very cautious before taking legal action.

What About Taxes?

Good news: in most cases, if you inherit a checking account or receive a cash distribution from a trust, you don’t pay taxes. However, if the trust earns income and passes that income to you, or if you inherit a tax-deferred account like a 401(k), you will owe taxes. You might receive a tax form called a K-1 and need to report it. That’s why Evan always recommends involving not just an attorney, but also an accountant and financial advisor.

Common Mistakes (And How to Avoid Them)

The two biggest mistakes Evan sees? First, beneficiaries causing unnecessary conflict because they don’t understand the trust process. Second, beneficiaries waiting too long to question shady activity. If something feels off, don’t wait five years. Get legal help early.

Trustees make mistakes too—often by misunderstanding the trust terms and giving money to the wrong people at the wrong time. It’s critical to understand the full structure, not just the part that sounds good in theory.

The Trust Eventually Ends—Here’s How

Eventually, every trust runs out of money. Sometimes it’s when all the funds are distributed. Other times, the trust terms say, “Once we hit $20,000, just divide it up and dissolve it.” Once there’s nothing left, the trust is officially closed.

Final Advice from Evan

Whether you're creating a trust, managing one, or benefiting from one, Evan’s advice is the same: talk to a professional. Most estate planning attorneys—like Evan—offer free consultations. Take advantage of that. Also talk to your financial advisor, your accountant, and yes, even your family. If you’re inheriting from a trust and haven’t done your own estate planning, this is a great time to get your ducks in a row.

At the end of the day, trusts are about protection, intention, and peace of mind. They’re not just for the rich. They’re for anyone who wants to make life a little easier for the people they love.

If you'd like to speak to Evan Taylor about your estate planning need, you can learn more from the Lawler Brown Law Firm here.