Isn't That Rich Podcast

Estate planning has a way of sounding like something reserved for the ultra-wealthy. You hear the word "trust", and your mind jumps straight to trust fund babies and generational fortunes. But that picture could not be further from the truth, and this week we set out to clear it up.

We welcomed back attorney Evan Taylor of Lawler Brown Law Firm in Marion for a conversation all about trusts. Who should have one, who really does not need one, and why so many people are better served by one than they ever realized. Evan spends his days in estate planning, wills, powers of attorney, and the real estate and business questions that come with them, so he knows how to take an intimidating topic and make it feel simple. Here is what we learned.

It Is Not About How Much You Have

The first thing Evan wanted to put to rest is the idea that estate planning is only for people with a lot of assets. A lot of folks do not even realize they have an estate, and plenty assume that if they are not wealthy, none of this applies to them.

"I don't have much" is a phrase Evan hears all the time. But that is not what any of this is about. If you have something you want to pass on, and someone you want in charge when you are gone, you have an estate. As Evan put it, he has never met the person who does not need some kind of estate plan. It might not be a trust, but everyone should have something basic in place.

At its heart, estate planning comes down to two simple questions. Who do you want in charge if something happens to you, and where do you want everything to go? Evan handles all the legal work behind the scenes. You just need to show up ready to talk about your family and your assets.

So What Is a Trust, Exactly?

In the simplest terms, a trust is a legal entity. Think of it a little like a business, only far less formal. It has its own name, and it is created through an agreement between three parties. There is the grantor, who is the person creating it. There is the trustee, who manages it, and the beneficiary, who benefits from it. If you are married, you and your spouse can be joint grantors of one trust together.

The real advantage is that because a trust is its own entity, it can hold things. You can deed real estate to it. You can name it as the beneficiary on your financial accounts. By running your assets through that trust, Evan can accomplish a whole range of goals for a family.

Trust or Will? What Is the Difference?

Most people have heard of a will. It is the document you see in the movies, with the attorney reading it line by line around a table. A will has a testator who creates it, an executor who manages it, and beneficiaries who receive from it. On paper, a will and a trust can look surprisingly similar. Both spell out who is in charge and who gets your things.

The big difference is that a trust is that legal entity we talked about, one that can actually hold and receive assets. A will cannot. A will is simply a declaration of your wishes. Here is where it matters most. When assets pass through a will, they typically have to go through probate, the court administered process for settling an estate. A trust that has been funded properly can avoid that process entirely.

Probate itself is one of the most misunderstood parts of all this. A lot of people assume probate only happens to those who did no planning at all. But as Evan explained, staying out of probate is not about whether you have a will or a plan. It is about doing the right type of plan and funding it properly.

Revocable and Irrevocable Trusts

There are many kinds of trusts, but almost everything flows from two main categories, and the difference between them comes down to control.

With a revocable trust, the same person can fill all three roles. You can be the grantor who creates it, the trustee who manages it, and the beneficiary who benefits from it while you are alive. Nothing really changes until you pass away. It is easy to set up, easy to maintain, and it can be amended or completely rewritten at any time. Someone could set one up one day, call the next morning wanting to change everything, and that is no problem at all. This is by far the most common trust, and it serves the vast majority of people well.

An irrevocable trust works differently. Those three roles cannot all be the same person, which means you give up some control. The tradeoff is that giving up control unlocks a couple of goals a revocable trust cannot reach, like protecting assets from long-term care and nursing home costs or minimizing estate taxes. The catch is that once it is set up, you are generally locked into what that document says, so these have to be structured very carefully.

Evan said irrevocable trusts usually come into play for two kinds of people. The first is someone who may be facing long-term care down the road, perhaps due to a degenerative condition like Alzheimer's or Parkinson's, who wants to start moving assets out of their name to protect them if Medicaid becomes part of the picture. The second is someone with significant wealth who is over the estate tax exemptions. At the time we recorded, Evan noted those exemptions sit around four million dollars in Illinois and roughly fifteen million federally for an individual, with double that for a married couple. Tax figures do shift, so those numbers are worth confirming with your attorney.

Do You Need Both a Will and a Trust?

If you set up a trust, you will still have a will, but a very simple one called a pour-over will. It does a few important things a trust cannot. It revokes any prior wills you may have signed years ago and forgotten about. It appoints your executor, which matters because some entities, like funeral homes, want to deal with an executor rather than a trustee. It "pours over" any assets you may not have funded into the trust, so everything ends up in the right place even if something was missed. If you have minor children, it also lets you nominate a guardian. Sometimes what matters most there is not naming who you want, but naming who you do not want.

Funding Is Everything

If you take one thing away from this episode, let it be this. Funding a trust is the most important part of the whole process.

The documents are only step one. Plenty of attorneys can draft them, and you can even buy them off the internet in a beautiful binder. But a binder full of documents does not accomplish anything on its own. Funding is what makes your estate plan work hand in hand with your financial plan. It means your trust either owns the asset or is set to receive it when you pass. Real estate gets deeded to the trust. Business interests can be assigned to it. For your bank accounts, you do not have to change the ownership, but you do want a payable on death designation pointing to the trust.

As Evan put it, an unfunded trust is like building a house and never moving in. You spent all the money and did all the work, and it still will not do what you wanted it to do.

Why Send Things Through the Trust at All?

Here is a fair question we had to ask. If you can just name your mom or your kids as the payable on death beneficiary on an account, and that already avoids probate, why bother routing it through a trust?

Beneficiary designations are wonderful for avoiding probate, and you should always have them. But when money vests immediately in your beneficiaries, things can get complicated. Picture three kids, each named directly on an account. The moment you pass, each one gets a check for a third. Meanwhile the bills are still coming due and the funeral has to be paid, and that is where the arguing starts over who covers what. Run everything through a trust instead, and the trustee can pay the final bills first, then divide what is left, with no fighting.

A trust also plans for the "what ifs." If one of your children passes before you, the trust can direct their share to their own children instead of leaving them out. If money is flowing down to young grandchildren, the trust can hold it until they reach an age you choose. A trust can also protect your beneficiaries in ways a direct designation cannot, shielding assets from creditors or keeping an inheritance from knocking someone off state benefits, disability, or Medicaid.

That is really the heart of it. A trust is not about being wealthy. It is about protecting what you do have, whether that is a lot or a little, and making sure it reaches the people you want without outside interference.

So Who Actually Needs a Trust?

There is no single rule here. Someone with a simple family situation, a simple set of assets, and no worries about fighting or creditors can absolutely just do a will, and Evan is glad to help with that. Not everyone must have a trust.

That said, a few situations point strongly toward one:

• A beneficiary who needs protecting, whether from creditors, from outside pressure, or from themselves.
• Blended families. These are among the most often litigated situations in estate planning, and court gets expensive fast. Inside a single joint trust, Evan can compartmentalize what is yours, what is your spouse's, and what is shared, so you can provide for your spouse and still leave a legacy to your own children.
• More complex assets, like multiple parcels of real estate, rental properties, a business, or property in more than one state, which can otherwise mean probate in several states at once.

Once Evan learns about a family and their assets, there is usually something in the picture that points toward a trust, and once he explains why, most people agree, because it protects the people they love.

The Value Question

From a banking standpoint, this is a conversation we have all the time. We talk about value over rate, and the same idea applies here. A will is less costly upfront. But it can be far more costly in the long run, through probate, potential litigation, and the emotional strain on a family that you honestly cannot put a price on.

Evan said it plainly, and it stuck with us. A trust is always worth the money. Even if the only thing it ever accomplishes is avoiding probate, it is less expensive than probate. Usually it is doing a lot more for you than that.

What Setting One Up Actually Looks Like

Evan keeps the process relaxed, and it usually goes like this:

1. A free, no obligation consultation. You do not need to bring a stack of bank statements. Just be ready to talk about your family and your assets in general terms, with ballpark values. At the end, Evan quotes a flat fee, not an hourly rate, and walks you through any options.
2. A review meeting. He drafts what you chose, walks you through the highlights so the legal language does not overwhelm you, marks up what matters, and sends it home in a binder so you can review it on your own time.
3. A signing meeting. You go over any last questions and get everything signed.
4. A funding follow-up. Often there is a fourth touchpoint, a meeting or a call, just to make sure everything was funded properly, because he does not want anything slipping through the cracks later.

A Trust Is a Living Thing

It is called a living trust for a reason. Life changes, and your plan should keep up. There is no hard rule, but Evan suggests sitting back down every three to five years at a minimum. Any time something meaningful happens, a new grandbaby, a marriage, the passing of the person you named as trustee, or even switching financial advisors, it is worth a quick call to check whether anything needs updating.

We covered a lot of the smaller questions too, the kind that tend to pop up once you start really thinking about all this:

• Selling a house that is in your trust? No problem. You simply sign as trustee instead of as yourself, and you do not have to update the trust afterward. A new house just gets deeded into the trust the same way.
• Buying a new home? Let the title company know about your trust. A certification of trust gives them what they need to title it correctly while keeping your actual trust private.
• Insurance. This is an easy one to overlook, and it is close to our hearts on the FSB Insurance side. Any time you change the title on real estate, notify your insurance company so the trust can be added. With a revocable trust you should be covered even if you miss it, but it is always best practice to make the call.
• Powers of attorney and a living will. A full estate plan is more than a trust. It includes healthcare and financial powers of attorney, which cover you if you become incapacitated and cannot make decisions for yourself, and a living will, which speaks for you in an irreversible medical situation. One important note Evan flagged, a power of attorney ends the moment someone passes away. It does not carry over, and that surprises a lot of people.
• Assignment of personal property. This one handles your tangible, untitled things, like furniture and personal possessions, assigning them into the trust. You can pair it with a memorandum if you want specific items, say the antique china, to go to a specific person.

Peace of Mind Is the Real Payoff

What stuck with us most is how much easier this conversation is to have now, while you are in good health and things are the way you want them, rather than years down the road when it can feel a lot heavier. There is real peace of mind in getting it done. Evan admitted he put his own planning off for a while even though he does this every day, simply because nobody loves sitting down to talk about it. But you always think you have more time, right up until you do not.

To bring the whole "it is only for the wealthy" myth full circle, Evan shared that he and his wife have a joint trust of their own. Not because they have a fortune, but because they have two young daughters, and they wanted the right people in charge and a thoughtful structure for how their girls would be cared for. That is what a trust is really about.