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A trust is a legal arrangement where you place assets into an entity managed for your benefit during your lifetime and for your beneficiaries after your death. In Indiana, the most commonly used types of trusts are revocable living trusts (which you can change and which avoid probate), irrevocable trusts (which you cannot change but offer tax and asset protection benefits), testamentary trusts (created through your will), and special needs trusts (protecting beneficiaries with disabilities). Trusts provide privacy, control, and efficiency that wills alone cannot offer.
What Trusts Are and Why They Matter
A trust is a legal document that lets you transfer property to a trustee (often yourself initially) who manages it for the benefit of your beneficiaries. Unlike a will, which is public and only takes effect after you die, a trust is private and can work during your lifetime, managing your assets and ensuring they transfer smoothly to your heirs.
In Indiana, trusts are governed by Indiana Code § 30-4-1 et seq. The key advantage: assets held in a trust pass directly to beneficiaries without going through probate. This saves time, money, and privacy.
Why Trusts Matter: Three Core Benefits
- Probate Avoidance If you leave assets through your will, they must go through probate. If you place assets in a trust, they pass directly to beneficiaries. No court process, no delays, no public record.
- Privacy Wills are public documents, filed in the County Probate Court and accessible to anyone. Trusts are private. No one outside your family and attorney knows what you owned or who inherited.
- Control and Incapacity Planning If you become incapacitated, a successor trustee you name steps in and continues managing your assets without requiring court involvement or a guardianship proceeding.
Types of Trusts
Revocable Living Trust
You create this during your lifetime, transfer assets into it, manage them as trustee, and can change or revoke it anytime. It avoids probate, provides incapacity planning, and maintains privacy. After you die, a successor trustee distributes assets according to your instructions.
Irrevocable Trust
Once created, you cannot change or revoke this trust. That permanence is the point — irrevocable trusts remove assets from your estate, it can provide for the care of the named beneficiary (often you during your lifetime and any later beneficiaries after your death), and can assist with Medicaid planning if done properly. They’re more complex and require careful planning.
Testamentary Trust
This trust is created through your will and only becomes active after you die. It goes through probate but allows you to place conditions on inheritances — for example, distributing money to your child at certain ages rather than all at once and selecting who will manage those funds for your child.
Special Needs Trust
If you have a beneficiary with a disability, a special needs trust lets you leave them money without disqualifying them from government benefits like SSI or Medicaid. See our Elder Law & Special Needs Planning page for details.
Revocable vs. Irrevocable: When to Use Each
Most people start with a revocable living trust as their core estate planning tool. It’s flexible, familiar, and can be changed if your life changes. However, if you want significant tax savings or asset protection, an irrevocable trust may make sense as a companion strategy.
Potential Gaps Without a Trust
Many people rely only on a will and never create a trust. This creates several risks:
- Your estate goes through probate, possibly costing thousands and taking 6–12 months
- Your family has no structure for managing your assets if you become incapacitated
- Your family’s privacy is lost — a will is a public document
- You miss tax planning opportunities that could save your estate thousands
How Griffith Xidias Law Group Helps
We start by understanding your assets, your family structure, and your goals. Do you need probate avoidance above all else? Are you concerned about taxes? Do you have a second marriage or adult children who don’t get along? Do you want ongoing management for a beneficiary who can’t handle money?
Based on your answers, we recommend the right trust structure. For most Indianapolis families, a revocable living trust paired with a pour-over will is the foundation. For business owners or high-net-worth clients, we might recommend irrevocable strategies or specialized trusts.
Dive Deeper Into Trust Types
Explore specific trust strategies:
- Learn about revocable living trusts and how to fund them
- Explore irrevocable trusts for tax and asset protection
- Learn about special needs planning for beneficiaries with disabilities
- Understand how trusts connect to business succession planning
Return to estate planning to explore more.
Frequently Asked Questions About Trusts
Do I need a trust if I have a will?
Most people benefit from having both. Your will is a backup for assets you didn’t place in a trust, but your primary estate planning tool should be a revocable living trust if probate avoidance and privacy matter to you.
What’s the difference between a revocable and irrevocable trust?
A revocable trust is flexible — you can change it, add to it, or revoke it at any time. An irrevocable trust, once created, cannot be changed. That permanence can provide significant protection, but you give up flexibility.
How much does it cost to set up a trust?
A revocable living trust typically costs $800–$3,000 depending on complexity. An irrevocable trust costs more ($2,000–$5,000+) because of additional tax and legal considerations. When you include the cost of avoiding probate (which can run $3,000–$10,000), a trust usually pays for itself.
Does a trust really avoid probate?
Yes, but only for assets you place “in” the trust. You must fund the trust by retitling assets (real estate, bank accounts) in the trust’s name. Any assets left out of the trust still go through probate. Many trusts fail because they weren’t properly funded.
Will a trust help me with taxes?
A basic revocable living trust doesn’t provide tax savings by itself. However, irrevocable trusts and other advanced strategies can reduce estate taxes. If your estate is large enough to face federal estate tax (over $13.61 million in 2024), trusts become crucial. We work with your tax professionals and discuss tax implications with every client.