Top Myths About Trusts and Why They’re Wrong
Planning for the future can feel challenging, especially when considering what tools you should use to protect your assets and loved ones. Many people believe that trusts are only for the wealthy or that they eliminate the need for other legal documents. Misunderstandings like these can lead to unnecessary stress for those trying to prepare responsibly.
That’s where The Law Offices of Steven H. Peck, Ltd. comes in. Their Riverwoods, IL estate planning attorney helps individuals and families understand how trusts can benefit their legacy. Contact the firm today to set up a schedule and learn how proper planning can protect what matters most to you.
Myth 1:
Trusts Are Only for the Wealthy
One of the most common myths about trusts is that they’re reserved for people with large estates. In reality, trusts can benefit individuals at nearly every income level. Whether someone owns a modest home, retirement savings, or a family business, a trust can provide valuable protection and flexibility.
Trusts help individuals control how their assets are distributed after death and can even offer benefits during their lifetime. They can help avoid probate, maintain privacy, and streamline the transfer of property. Many families find that trusts make the process of passing on assets smoother and more secure.
By working with a knowledgeable attorney, clients can create a trust that fits their specific goals. There’s no one-size-fits-all solution, and that’s what makes trusts such a powerful part of estate planning. When tailored properly, they serve people from all walks of life.
Myth 2:
Trusts Completely Eliminate the Need for a Will
Another misconception is that having a trust makes a will unnecessary. While a trust can handle many assets, a will still plays a vital role in a comprehensive plan. For example, a will can direct the handling of property not included in the trust or name guardians for minor children. Key functions of a will include:
Covering remaining assets: A will distributes property that wasn’t placed in the trust.
Naming guardians: Parents can use a will to choose who will care for their children if something happens to them.
Clarifying final wishes: A will provides clear guidance about personal belongings or special instructions not addressed by a trust.
By having both a will and a trust, individuals can create a stronger, more complete estate planning strategy. Together, these documents prevent confusion and reduce the likelihood of legal disputes after death.
Clients often discover that working with an attorney like Steven H. Peck helps them balance the benefits of both tools effectively. Each document serves its own purpose, and when coordinated properly, they create lasting protection for loved ones.
Myth 3:
Creating a Trust Means Losing Control of Your Assets
Some people hesitate to establish a trust because they think they’ll lose control over their property. In reality, most trusts—especially revocable living trusts—allow the person creating the trust to remain in full control while they’re alive. They can modify, add, or remove assets as their circumstances change.
A revocable trust acts as a flexible management tool rather than a permanent handover of assets. The creator, known as the grantor, often serves as their own trustee while they’re alive, which means they maintain authority over how their property is used. It’s only after the grantor’s death or incapacitation that a successor trustee steps in to manage the assets.
This structure provides peace of mind because it allows flexibility during life and structure for the future. As part of comprehensive estate planning, it helps individuals plan for unexpected events without giving up autonomy. In short, a trust doesn’t take control—it enhances it.
Myth 4:
Trusts Are Too Complicated to Set Up
Many people assume that setting up a trust is too difficult or time-consuming. While trusts do involve legal precision, they can be straightforward when guided by an experienced attorney. The process typically includes identifying assets, naming beneficiaries, and transferring ownership into the trust. Common steps in creating a trust include:
Defining goals: Clarify what you want the trust to accomplish—whether it’s asset protection, avoiding probate, or caring for a loved one.
Selecting the trustee: Choose someone trustworthy to manage the trust responsibly, either during your lifetime or after your passing.
Transferring assets: Officially move property titles, accounts, or investments into the trust’s name to make it effective.
When guided through these steps, most clients find the process less intimidating than they expected. The key is clear communication and professional support throughout each stage. Attorneys like Steven H. Peck make estate planning accessible, practical, and aligned with each client’s needs.
Myth 5:
Once a Trust Is Created, It Can’t Be Changed
Another misconception is that trusts are set in stone. While some types, such as irrevocable trusts, are more permanent, revocable living trusts can be changed, amended, or dissolved entirely during the grantor’s lifetime. This flexibility allows individuals to adapt their plans as their financial or family situations evolve.
People often revise their trusts after major life events like marriage, divorce, or the birth of a child. They can add new beneficiaries, replace trustees, or shift how assets are distributed. This adaptability makes revocable trusts an attractive choice for many people.
Incorporating flexibility into estate planning means clients can make updates without starting over. An attorney can review a trust periodically to confirm it still meets the person’s goals and complies with current laws. Planning should evolve with life, and a well-crafted trust allows just that.
Myth 6:
Trusts Automatically Protect Against Creditors
Some believe that placing assets in a trust shields them completely from creditors or lawsuits. However, this depends on the type of trust created. Revocable living trusts generally don’t protect assets from creditors during the grantor’s lifetime because the assets are still under their control.
Irrevocable trusts, on the other hand, may offer stronger protection since the assets are no longer owned by the individual. But even then, protection isn’t absolute—it depends on timing, intent, and state laws. Working with an attorney helps determine which structure best aligns with personal goals.
A trust should be designed with a clear understanding of its benefits and limitations. As part of comprehensive estate planning, it’s important to balance protection, flexibility, and accessibility. Creditors’ rights and trust laws can be nuanced, which is why professional legal advice is key.
Myth 7:
Trusts Are Only Useful After Death
Some people think trusts serve no purpose until after they pass away, but that’s not true. Trusts can also manage assets during the grantor’s lifetime, particularly in the event of illness or incapacity. This can prevent the need for court-appointed guardianship or conservatorship.
For example, if someone becomes unable to handle their affairs, the successor trustee can immediately step in to manage the trust. This helps maintain financial stability and continuity without court intervention. It’s an important safeguard that benefits both the individual and their family.
When integrated into estate planning, a trust provides protection for the future while offering immediate advantages today. It’s a versatile tool that serves people at every stage of life. By setting one up early, individuals can gain both peace of mind and practical benefits.
Myth 8:
Trusts Are Too Expensive to Maintain
Another common myth is that trusts are too costly to create or manage. While there are some initial and ongoing administrative costs, many people find that the benefits far outweigh the expenses. Trusts often save money in the long term by avoiding probate and reducing potential tax burdens. Key financial benefits of a trust include:
Avoiding probate costs: Assets in a trust typically bypass the lengthy and costly probate process.
Reducing legal disputes: A well-drafted trust minimizes family disagreements that can lead to costly litigation.
Streamlining asset transfers: Faster, more private transfers of property can save time and money for beneficiaries.
When comparing the upfront cost to potential savings, trusts often prove to be a wise investment. An attorney can explain fee structures and help determine which trust type offers the best return on value. Within estate planning, a trust isn’t an expense—it’s a long-term financial safeguard.
Myth 9:
You Don’t Need a Lawyer to Create a Trust
While it’s technically possible to create a trust without an attorney, it’s not advisable. Online templates or DIY kits can lead to errors that invalidate the document or cause future legal issues. Each state has unique requirements, and one small mistake can undermine the trust’s purpose.
A qualified attorney can help select the appropriate type of trust, draft accurate language, and properly fund it. They also make sure the document complies with New York State laws and reflects current tax regulations. This professional oversight helps prevent problems down the line.
Incorporating legal guidance into estate planning verifies that every element works as intended. A trust is only as strong as its structure, and experienced attorneys like Steven H. Peck help clients get it right the first time. Proper execution today means fewer complications tomorrow.
Myth 10:
Trusts Guarantee Privacy Forever
While trusts do provide more privacy than wills—since they don’t go through probate—they’re not completely private in every circumstance. Certain trust-related matters can still become public, such as disputes involving beneficiaries or court challenges. It’s important to understand that privacy is significant, but not absolute.
Privacy remains one of the strongest advantages of creating a trust. Families often appreciate that their financial details and personal wishes stay confidential during asset transfers. However, exceptions can occur depending on legal proceedings or state requirements.
An attorney can structure the trust to maximize privacy within legal limits. As part of thoughtful estate planning, this helps clients feel more comfortable sharing sensitive information while keeping it as secure as possible. Trusts reduce exposure but don’t eliminate it entirely.
Make Informed Estate Planning Decisions
Misunderstandings about trusts can prevent people from taking advantage of one of the most powerful estate planning tools available. The truth is that trusts aren’t just for the wealthy or the elderly—they’re for anyone who wants to protect their assets, provide for loved ones, and maintain control over their future. Whether someone’s goal is privacy, efficiency, or asset protection, the right trust can make all the difference.
At The Law Offices of Steven H. Peck, Ltd., clients receive personalized guidance tailored to their specific circumstances. Based in Riverwoods, Illinois, and serving clients throughout Lake County, Cook County, McHenry County, and DuPage County, Steven H. Peck helps individuals build solid plans for today and tomorrow. Don’t let misconceptions stand in the way of your financial security—reach out to us today to start creating a plan that truly reflects your wishes.