A common question we hear from clients is, “When do you think it is appropriate for us to establish a trust?” There is no real definitive answer when it comes to the timing of implementing a trust, or if one is necessary for your situation. Whether a trust makes sense for you will depend on a variety of factors, including the assets you own, the size and complexity of your estate, your family circumstances, and your overall estate planning goals.

While a trust can provide significant benefits, it is not necessarily the right solution for everyone. For smaller or less complex estates, there may also be alternatives that accomplish some of the most common objectives, particularly avoiding probate, without the additional complexity and ongoing administration that can come with establishing and maintaining a trust.

Let’s first explore some of the key considerations and potential advantages of incorporating a trust into your estate plan.

• Privacy and Avoiding Probate: When a will is administered through probate, the process can become lengthy and may include additional costs and administrative requirements. Probate proceedings also cause you to lose a sense of privacy as the will and other probate filings become public record.
• Owning Out-Of-State Property: Generally, a will is administered through the probate process in the state where you were a legal resident (domiciled) at the time of death. However, real estate located in another state that is not owned by a trust or otherwise structured to avoid probate may require a separate proceeding in the state where the property is located, commonly referred to as ancillary probate.
• Protecting a Vulnerable Loved One: A trust can also provide additional flexibility when a beneficiary may face difficulty managing an inheritance independently or may be vulnerable to financial exploitation, creditors, or incapacity. For example, a trust can include discretionary provisions, giving the trustee flexibility to distribute income or principal to a beneficiary based on the circumstances and terms of the trust. A spendthrift provision may also provide certain protections against creditors or others seeking to access a beneficiary’s inheritance. For families with a loved one who has special needs, a Third-Party Special Needs Trust may also be an important estate planning consideration. When properly structured, these trusts can help provide for a beneficiary while helping preserve eligibility for certain government benefits.
• Incapacity Planning: A properly drafted revocable trust can provide another layer of continuity on top of a Durable Power of Attorney by intentionally establishing how trust assets should be managed if you become incapacitated and how those assets should be handled after your death.

For some individuals and families, a trust may provide significant benefits as outlined above. For others, a combination of a will, beneficiary designations, joint ownership, payable-on-death or transfer-on-death designations, and other estate planning tools may accomplish their goals just the same.

Probate Avoidance Strategies in Iowa

• Titling Assets JTWROS: Assets owned jointly by two individuals can be retitled as Joint Ownership with Rights of Survivorship to bypass probate. Upon the death of the first owner, the asset will automatically pass to the surviving owner by operation of law.
• POD/TOD Designations: Financial accounts may allow the owner to designate a beneficiary through a Payable on Death (POD) or Transfer on Death (TOD) designation for bank accounts and non-qualified investment accounts respectively. When properly established, these designations can allow assets to transfer directly to the named beneficiary upon the account owner's death outside of probate.
• Iowa’s Small Estate Affidavit: Iowa law also provides another potential option for certain smaller estates. As of July 1, 2026, Iowa's small estate affidavit threshold increased from $50,000 to $100,000 for qualifying probate assets, excluding real estate. This can include any personal property such as bank accounts, vehicles, or personal belongings. Once 40 days have lapsed since the decendant’s death, a small estate affidavit can provide a simplified method for transferring certain assets without a full probate administration.

Final Thoughts

The bottom line is that there is not one single strategy that works the same for every individual or family. Estate planning requires very careful consideration, and we encourage receiving legal guidance to help you evaluate your assets, family circumstances, and long-term goals and determine which tools are appropriate for your unique situation.

At Syverson Strege, we are happy to walk alongside you throughout this process and collaborate with your estate planning team to help ensure your financial plan and estate plan work together effectively.