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For Americans doing estate planning, a revocable living trust may be the first place to start.
According to George Pennock, director of tax, trusts and estates at Schwab Wealth Advisory, revocable living trusts are “the most commonly used tool by estate planners and are a fundamental component of most estate plans” (1).
Take John, a married 78-year-old father of three who is sorting out his financial affairs. His situation mirrors that of countless retired Americans who begin drafting wills and trusts before they die.
John is now preparing to take the pressure off his family. He knows how confusing probate can be.
When his father died, his family spent the next year dealing with attorneys and trying to navigate the confusing and complicated estate process. The situation caused tension between him and his siblings, and John eventually realized that the problem could have been avoided if his father had set up a living trust.
So, after weighing his options, he established a revocable trust, which gave him the flexibility to change the terms at any time during his lifetime.
By contrast, an irrevocable trust is set in stone once signed but can reduce the tax liability of his estate.
Now he must decide what belongs in it and what does not. Here are tips for setting up a living trust, and five assets to avoid being involved in.
A living trust is often a simpler option for loved ones than having them deal with the lengthy probate process.
Unfortunately, many people have no idea what “probate” is until they learn more about it.
Sometimes, but not always, when a person dies – even if they left a will – a legal process called probate occurs. Probate requires proving the will, naming an executor to administer the estate (if one has not already been named), paying debts and distributing remaining assets to heirs.
This process can take years, require extensive paperwork and ongoing legal fees.
For example, after Ozzy Osbourne’s death in July 2025, it was reported that his $220 million estate would face huge estate taxes and lengthy probate proceedings (2). according to a Hello! The magazine interviewed Gideon Alper, an estate planning attorney at Alper Law, “If Ozzy’s assets were placed in trust, his family could inherit faster and more privately(3).”
In John’s case, a trust could help his family avoid probate, protect their privacy, and minimize estate taxes upon his father’s death. A trust is a legal document that allows you to retain control over your money and property and designates who will receive what when you die.
The benefits can also transcend death. “Anyone concerned about stroke, dementia or Alzheimer’s disease may want to consider using a trust to help ensure their resources are preserved, managed and used according to their wishes,” noted Pennock of Schwab Wealth Consulting.
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Before we get into living trusts, it’s worth considering a simpler way to help your children live a more comfortable life after your death.
Life insurance can be a faster, smoother way to ensure your loved ones are financially protected when this happens. But not all life insurance policies are created equal, so make sure you find a policy with premiums and benefits that match your financial goals from a provider you trust.
For example, Ethos offers term life insurance, is rated “Excellent” on Trustpilot, and has an A+ rating from the Better Business Bureau (BBB). Ethos offers simple, affordable insurance over a period of time (usually 10 to 30 years).
As a licensed third-party insurance administrator, Ethos partners with some of the industry’s top insurance companies, such as Banner Life, TruStage Financial and Ameritas Life Insurance.
Even if you have a pre-existing medical condition, you can get coverage online or over the phone in as little as 10 minutes, with guaranteed approval. Even better, pricing starts at just $9.80 per month.
Ethos also gives you the flexibility to choose coverage amounts from $2,000 to $100,000 based on your needs, so you know exactly what you’re getting. Unlike the waiting time you can expect through probate, life insurance typically pays out in weeks or months, rather than years. This means your child should get support sooner rather than later.
Apparently, even a rich guy like Ozzy Osbourne can make mistakes. This is why it is important for John to meet with a qualified and regulated financial professional to ensure that he does not make mistakes in his estate planning.
A financial advisor can help crunch the numbers and create a workable plan.
But hiring an advisor can be a lifelong commitment that could affect your retirement. That’s why finding a reliable advisor is crucial.
This is where Advisor.com comes into play. The platform connects you with experts near you for free.
Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratio and regulatory background. Additionally, their network is made up of trustees, who are required by law to act in your best interests.
Just enter a few details about your finances and goals, and Advisor.com’s AI matching tool will connect you with qualified experts that best fit your needs, based on your unique financial goals and preferences.
Finding the right advisor isn’t always easy – there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation without having to hire one to find out if they’re right for you.
Once you find the right financial advisor, the next step is to get a clear understanding of where your money is actually going. First, the basics – budgeting and tracking your spending.
Here are five things to consider missing from a revocable living trust—and what the consequences might be if you keep them.
vehicle: Whether it’s a 1963 Corvette, a Harley helicopter or a propeller plane, a simple written statement is all it takes to transfer ownership to the beneficiary. But if it is held in a trust, your estate may be vulnerable to lawsuits arising from an accident involving the vehicle.
Annuities and Retirement Accounts: A trust can convert a non-taxable account into a taxable account. However, you can set up the trust itself as the beneficiary so that those accounts transfer directly to your trustee without the need for an IRS agent to bust a wake.
life insurance: You do not need to place your life insurance in a revocable trust. Instead, you can avoid estate taxes by simply naming your beneficiaries in the policy or creating an irrevocable life insurance trust (ILIT).
Assets held in other countries: This gets complicated because you may not be allowed to put international assets into the trust. To find out if this is possible, you need to consult with an estate attorney licensed in the country where your assets are located.
Checking and Savings Accounts: If you use these to pay your monthly bills, you may run into financial problems unless you are a trustee and given full control over the trust assets. There’s an easier way: exclude these accounts from trust.
Please note that the information in this article does not constitute legal advice. Before making any decisions, consult with a trust attorney, financial advisor, or other professional in your state—your family will appreciate your decision.
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