How Much Money Do You Need to Create a Trust?

One of the most common questions I hear as an estate-planning attorney is:

“How much money do I need before it makes sense to create a trust?”

This question often comes from people who assume that trusts are only for the very wealthy, or that estate planning only becomes necessary once someone reaches a certain net worth. In reality, that assumption causes many people to delay planning far longer than they should.

The short answer is this:
There is no minimum dollar amount required to justify creating a trust.

What matters far more than how much money you have is what you own, who you want to protect, and how you want things handled if something happens to you.

Why Net Worth Is the Wrong Measure

Estate planning is not about hitting a financial milestone. It is about control, protection, and efficiency.

A trust is a legal tool that allows you to:

Decide who manages your assets if you become incapacitated or pass away
Decide who receives those assets and under what conditions
Avoid the probate process, which is public, time-consuming, and expensive

None of those goals require a high net worth. They require intent.

Many people with modest estates still benefit enormously from having a trust in place, especially when the alternative is probate.

The Role of Real Property

For most people in California, the most significant asset they own is their home.

If a house is titled in an individual’s name at death, it generally cannot be transferred to heirs without going through probate, unless a specific exception applies. Probate can take many months, sometimes more than a year, and it delays the ability to sell, refinance, or even properly manage the property.

A trust allows real property to pass to successor trustees and beneficiaries without court involvement. As a result, even someone whose only major asset is a home may be an excellent candidate for a trust.

In practice, I regularly see families forced into probate not because the estate was large, but because the home was never placed into a trust.

Minor Children and Long-Term Planning

Another situation where a trust becomes important regardless of net worth is when minor children are involved.

A will can name guardians, but it does not provide a structure for managing money for children over time. Without a trust, assets left to minors may require court-supervised management, and children can receive funds outright at a relatively young age.

A trust allows you to:

Appoint someone you trust to manage assets for your children
Set age-based or purpose-based distributions
Avoid court oversight and ongoing reporting requirements

Again, this has little to do with how much money is involved and everything to do with responsible planning.

Why People Delay Creating a Trust

Despite these benefits, many people delay creating a trust because they believe:

They are not wealthy enough
Their estate is “simple”
They will handle it later

Unfortunately, estate planning is often postponed until after a health scare, a family emergency, or the death of a loved one. By then, the opportunity to plan has passed, and the family is left dealing with the legal consequences.

In many cases, the cost of probate far exceeds what it would have cost to create and fund a trust in the first place.

A Better Way to Think About the Question

Instead of asking how much money you need to create a trust, a better set of questions is:

Do I own real estate?
Do I want to avoid probate for my family?
Do I want privacy instead of a public court process?
Do I want clear instructions for how my assets are handled?
Do I have children or dependents who need protection?

If the answer to any of these is yes, a trust may be appropriate regardless of your current net worth.

The Takeaway

There is no magic number that determines whether you should have a trust. Estate planning is not about wealth; it is about planning.

If you own a home, have people you care about, or want to make things easier for those you leave behind, a trust can be an effective and practical tool. Waiting until you feel “wealthy enough” often means waiting too long.

William Ha is a California-licensed estate planning attorney. This article is for informational purposes only and does not constitute legal advice. Every situation is different, and you should consult an attorney regarding your specific circumstances.