Do I Need a Trust? A Spokane Financial Advisor’s Guide to Simplifying Estate Planning
Written by Noah Schwab, a CFP® professional and Spokane financial advisor
“Do I need a trust?”
I get this question a lot.
Before I answer, I want to offer a word of caution: trusts can be oversold, much like whole life insurance. I have seen some Spokane law firms make the process seem far more complicated than it needs to be, with thick binders, complex diagrams, and legal language that leaves families confused. Many of these trusts were created for people who did not actually need one.
Whether a trust is right for you depends on your goals and the complexity of your situation. Trusts can be very useful, but they are not one-size-fits-all. For many people, a well-drafted will and properly updated beneficiary designations are enough to accomplish their wishes.
As a Spokane financial advisor and CFP® professional, my role is not to sell complexity. It is to help you simplify your financial life while still achieving your goals, especially in estate planning. The simpler your plan is, the easier it will be for your spouse and heirs when the time comes.
This article will explain:
- What a trust actually is in plain English
- When a trust makes sense
- When a trust may be unnecessary
- Common situations I see in Spokane
- How trusts fit into a broader financial plan
My goal is to help you make a confident, informed decision without pressure. I do not receive compensation for referrals to estate planning attorneys and have no financial incentive to recommend a trust.
What Is a Trust in Plain English
A trust is a legal arrangement in which one person, the trustee, manages assets for the benefit of another, the beneficiary, according to written instructions. In some cases, the trustee and beneficiary can be the same person.
The instructions explain:
- Who controls the assets
- Who benefits from them
- When distributions are made
- How assets are handled if you become incapacitated or pass away
There are two main types of trusts: Revocable and irrevocable. An irrevocable trust cannot be changed, while a revocable trust can. Most people are asking about a revocable living trust when they inquire about trusts.
A revocable living trust is created while you are alive, can be changed or revoked at any time, usually holds assets such as real estate, bank accounts, and taxable investment accounts, and becomes irrevocable at death, meaning the assets cannot be removed.
The key feature people often consider is that assets properly titled in a trust avoid probate. This can be valuable, but it is not always necessary. If your beneficiary information is correct and accounts are titled properly, you may not need a trust to avoid probate.
Do You Actually Need a Trust
The answer is maybe, but not automatically.
Many people assume they need a trust because they have a wealthy friend who set one up, attended a seminar that suggested disaster without one, were advised by an attorney as a default, or own a home or retirement account. None of these reasons alone means you need a trust. The decision should be based on your goals and family situation.
Situations Where a Trust Can Be Very Helpful
Avoiding Probate
Probate is the court-supervised process of settling an estate. In Washington State, probate is generally streamlined but still takes time, involves legal filings, and becomes part of the public record. A properly funded trust can help your family avoid probate entirely for the trust's assets.
This is particularly helpful if your spouse or children would struggle with paperwork, if you want faster access to assets for your heirs, or if privacy is important.
Keeping Your Estate Private
Wills become part of the public record during probate, but trusts do not. If privacy matters, a trust can keep details of your estate out of public view.
Providing Clear Instructions for Children or Heirs
Trusts are excellent tools for adding structure and clarity. They allow you to go beyond a simple “everything goes to X” approach and create a plan that reflects your values and intentions.
Examples include distributing assets over time to prevent mismanagement, setting rules around education, healthcare, or age-based distributions, and protecting beneficiaries who may not be financially responsible or lack experience managing money. This added structure can be invaluable for families with younger children, blended families, or other special concerns.
Planning for Incapacity
A trust allows a successor trustee to manage assets if you become incapacitated, without court involvement. This can simplify matters for your spouse or family during stressful times, providing continuity that powers of attorney alone may not offer.
Owning Real Estate in Multiple States
Many Spokane retirees own property in multiple states. If you have a primary residence in Washington and a vacation home in Idaho, Montana, Arizona, or elsewhere, your estate may be subject to multiple probate proceedings, one in each state where property is located. Without a trust, your heirs may have to go through ancillary probate in every state, leading to more legal filings, higher costs, longer delays, and additional attorney involvement.
A properly structured and funded trust can avoid this. When property is titled in the trust, it passes to heirs without probate, simplifying the process for your family. One common mistake is setting up a trust but never retitling property into the trust. Creating trust is not enough; assets must be properly titled for it to work as intended.
When You May Not Need a Trust
Your Estate Is Simple
If you have one home, retirement accounts with beneficiaries, a taxable account with a transfer-on-death designation, and want everything to go to your spouse and then your children, a well-drafted will and updated beneficiaries may accomplish everything you need.
Most Assets Are in Retirement Accounts
401(k)s, IRAs, Roth IRAs, and pensions do not go through probate when beneficiaries are properly named. In many cases, trusts add complexity without significant benefit.
Being Pushed Into a Trust Without Clear Reasons
If you are being told everyone needs a trust, that it will save huge taxes, or that it is the only responsible option, proceed cautiously. Estate planning should be purpose-driven, not fear-driven.
Trusts and Taxes
A common misconception is that a revocable living trust automatically saves taxes. In most cases, it does not. A basic revocable living trust does not reduce income taxes, avoid capital gains taxes, or eliminate estate taxes on its own. Advanced estate tax strategies, such as bypass or generation skipping trusts, involve irrevocable trusts and careful planning, especially in Washington State.
Washington State Considerations
Washington has its own estate tax with a relatively low exemption. For higher-net-worth families, trusts may assist with estate tax minimization, charitable giving, and legacy planning. However, the solution should match the problem, and not everyone requires this level of complexity.
The Importance of Simplicity
Simplifying your estate plan as much as possible while accomplishing your wishes benefits everyone. Multiple overlapping trusts, outdated documents, and unnecessary complexity can confuse heirs and create problems. Clear, coordinated planning is always more effective.
How a Spokane Financial Advisor Fits Into This Decision
As a CFP® professional, I do not draft legal documents; that is the attorney’s role. My role is to understand your financial picture, clarify your goals, identify where complexity is needed, coordinate beneficiary designations, investment accounts, and estate documents, and help you ask better questions before paying for legal work. When done well, your trust, beneficiaries, and investment plan all work together.
The Bottom Line
You might need a trust, but you might not. Trusts can help avoid probate, maintain privacy, plan for incapacity, and provide structure for heirs. Many people are well served by a solid will, updated beneficiaries, and a simplified financial structure. The right answer depends on your situation. The best first step is a clear conversation with a financial advisor or multiple attorneys.
Meet with our Spokane Financial Advisor today
If you are asking, “Do I need a trust?” you are thinking in the right direction. As a Spokane financial advisor, I help families evaluate whether a trust makes sense, coordinate estate planning with retirement and tax planning, avoid unnecessary complexity, and make confident, informed decisions. The first step is simply a conversation. If you would like help reviewing your situation or understanding whether a trust fits into your broader financial plan, I would be happy to talk.
About the Author
Noah Schwab CFP® is a financial advisor in Spokane, Washington, helping retirees with $ 1M+ maximize their 401(k) with Roth conversions and tax strategies.
- No commissions or insurance
- Investment management, tax and financial planning
Noah Schwab, CFP®, is a Spokane financial advisor specializing in helping retirees with tax-efficient retirement income strategies, Roth conversions, and estate planning. This article is for
