At What Net Worth Do You Need a Trust?

A trust becomes useful when your net worth reaches a point where you have something meaningful to protect, transfer, or manage.

There is no legal minimum net worth to create a trust, but there are practical thresholds at which a trust simplifies your estate plan, protects your assets, and keeps your affairs private. In our experience, many people wait too long to consider a trust because they assume trusts are only for the very wealthy.

In reality, a trust can be helpful even with a modest estate if you want more control over how your assets are handled.

What a Trust Is and Why It Matters

A trust is a legal arrangement that lets you hold property in a separate entity during your lifetime and distribute it efficiently after your death. The most common is a revocable living trust. You can manage your own assets, change the trust at any time, and avoid probate for property transferred into the trust. A trust also gives your family a clearer roadmap in the event of your death.

Most people begin considering a trust once their assets exceed the threshold at which probate becomes costly or time-consuming.

In Florida, for example, even a simple probate can take several months and cost thousands of dollars. If you own a home, investment accounts, or a business, avoiding probate often provides more value than the cost of setting up a trust.

We see many clients create trusts when their net worth is between $300,000 and $1 million because that is when probate would be a meaningful burden on surviving family members.

A trust is also helpful when you own real estate, especially if you own property in more than one state. Multiple properties lead to multiple probates, which increases both cost and delay.

Moving out-of-state property into a revocable trust avoids those separate court procedures. Even if your net worth is under $500,000, owning a second home is often enough to justify a trust.

How Net Worth and Complexity Affect Whether You Need a Trust

Parents often create trusts to protect minor children. A will requires the court to appoint a guardian of the property, which adds oversight, cost, and delay. A trust avoids that structure and allows you to appoint someone you choose to manage the assets.

You can also direct how and when children receive money. In our experience, clients with young families often choose a trust regardless of net worth because the control and flexibility are more important than the dollar amount.

A trust may also be appropriate for people who want to protect assets from future creditor issues. A revocable trust does not provide asset protection, but it can be paired with an LLC, homestead planning, or an irrevocable trust when appropriate. Many individuals begin exploring irrevocable trusts once their net worth reaches $1 million to $5 million, especially if they are concerned about lawsuits, business liability, or long-term care costs.

Higher-net-worth families typically combine a revocable trust for probate avoidance and an irrevocable trust for asset protection.

Knowing when a trust becomes beneficial depends more on complexity than on a specific number. If you expect your estate to grow, if you have blended family issues, or if you want to make administration as smooth as possible for your heirs, a trust can make sense even before you reach seven figures.

A trust allows for more detailed planning than a will and gives you greater control over timing, restrictions, and oversight.

Here is a simple guideline showing when a trust commonly becomes useful:

• Under $250,000: A trust is optional unless you have young children, own real estate, or want to avoid probate.
• $250,000 to $1 million: A trust often provides meaningful value by avoiding probate and managing property for beneficiaries.
• $1 million to $5 million: A trust is recommended for most families, especially if you own multiple assets, investment accounts, or a business.
• Over $5 million: A trust is typically necessary for probate avoidance, tax planning, and future asset protection.

The type of assets you own matters as much as your total net worth. A single checking account and a car rarely justify the creation of a trust. But a home, retirement accounts, and brokerage accounts do.

If you have property titled in your name alone, those assets must go through probate unless they are held in a trust or have proper beneficiary designations. We regularly see people with modest net worths benefit from a trust simply because of the nature of their assets.

Other Reasons You May Need a Trust Regardless of Net Worth

Privacy is another reason many people choose a trust. Probate records are public. Anyone can see what you owned, what debts you had, and who received your property.

A trust keeps those details private. Clients who value privacy, especially business owners and professionals, often choose a trust for this reason alone. Privacy concerns can become more important as wealth grows.

If you have family members who may disagree about your intentions, a trust can reduce conflict. A trust provides clearer instructions than a simple will and allows you to select a trustee you trust to carry out your wishes.

For blended families or second marriages, a trust can prevent misunderstandings and protect children from previous relationships. These situations arise at all net worth levels.

A trust also helps if you become incapacitated. Without a trust, your family may need a court-appointed guardian to manage your property. With a trust, the person you select can take over immediately. This avoids court involvement and keeps your affairs private. For many people, incapacity planning is one of the most important reasons to create a trust, regardless of net worth.

Taxes are not a factor for most families. The federal estate tax exemption is high, and Florida has no state estate tax. But high-net-worth individuals may use trusts to reduce future estate taxes or transfer wealth over time. Once net worth reaches $10 million to $20 million, trusts become an essential part of tax planning.

There is no single net worth number that dictates when you “need” a trust. The right time depends on your goals, your family, and the types of assets you own. If you want to avoid probate, protect children, simplify administration, maintain privacy, or manage future growth, a trust is often the most effective tool.

Many of our clients decide to create a trust once they understand how much easier it makes things for their families.

About the Author

Gideon Alper is a nationally recognized expert in asset protection planning. He has been quoted by major media publications as a leading authority in Florida asset protection and offshore trust formation. Gideon graduated with honors from Emory University Law School and has been practicing law for over 15 years.

Gideon and the Alper Law firm have advised thousands of clients about how to protect their assets from creditors.