Clients often ask whether making a will is enough, or whether it's really much smarter to create a probate-avoidance living trust. Much of this concern is obviously fueled by "living trust mills"  whose ads flog expensive living trusts and emphasize the horrors of probate.

When you cut through the advertising hype, the real answer to the question of whether you need a living trust is, "It depends." Some people, it turns out, need a living trust immediately, and others don't need one at all -- and most of us fall somewhere in the middle.

Opting Out of Probate With a Living Trust

Enter the concept of probate avoidance. There are a growing number of ways to transfer assets to inheritors free of probate within weeks or, at most, months of death. These include making gifts before death, adding a pay-on-death designation to a bank account, holding your house in joint tenancy with right of survivorship with your spouse or partner, and naming a beneficiary for life insurance and retirement accounts.

But only the living trust can be used for all types of property and offers the broad planning flexibility of a will. With a living trust, for example, you can name alternate beneficiaries to inherit property if your primary beneficiary dies before you do. That's something you can't accomplish with joint tenancy or a pay-on-death bank account.

Since it makes sense to avoid probate, does everybody need a living trust? Not necessarily. Living trusts do have a downside. Compared to wills, living trusts are considerably more time-consuming to establish, involve more ongoing maintenance and are more trouble to modify.

The drawbacks in some instances  are outweighed by the benefits for people who have large estates -- and therefore will achieve big savings by avoiding probate. The same goes for older people who are more likely to pass away in the next few or even ten years.

How Old Are You?

Living trusts make a lot less sense for most middle-income people in decent health who are under age 55 or 60. Remember, a living trust does nothing for you during your life. It follows that there is usually little reason for a 45-year-old to worry about probate costs for many years. In the meantime, a serviceable will, which is easier to establish and live with, will do a fine job of transferring your property to your loved ones in the highly unlikely event that you die without warning.

Another reason why it makes little sense for a healthy younger person of moderate means to worry about probate avoidance is that the problem may go away. In just the last ten years, easy-to-use probate-avoidance techniques, such as being able to name a beneficiary to inherit securities free of probate, have gained wide acceptance. It's a good guess that this trend will accelerate.

How Rich Are You?

After age, the biggest factor in deciding whether or not to create a living trust is wealth. At the risk of oversimplifying, the wealthier you are, the more you can save for your inheritors by avoiding probate. For example, a 45-year-old with $10 million might conclude it's not too soon to think about probate avoidance, just in case. A 45-year-old with $300,000 might sensibly decide to wait 15 or 20 years or more.

What kinds of assets you own is significant, too. Owning a small business or other assets that you don't want tied up during probate might push you to create a living trust at a younger age. Even if there's only a small chance that you'll die soon, you don't want to risk making your executor report to a judge for a year or more if you die unexpectedly.

Are You Married?

If you are married, and you and your spouse plan to leave the bulk of your property to one another, there is less reason to obsess about avoiding probate at an early age. If, like many couples, you own your big assets together, in joint tenancy or (if available in your state) as survivorship community property, probate won't be necessary for those assets. And for other property, most states let surviving spouses use expedited probate procedures that are faster and cheaper than standard probate.