Most of the time you name people. Spouse primary, kids contingent, done. The money skips probate, the carrier pays in a few weeks, and nobody needs an attorney. Trusts add cost and complexity, and there are four situations that call for one anyway.
Minor children are the first. A carrier will not hand a $750,000 check to a nine-year-old. If a minor is the named beneficiary, the money goes into a court-supervised guardianship or conservatorship, the court oversees it, and the child gets the whole remaining balance at 18. Eighteen. A trust lets you name a trustee and set the ages: a third at 25, a third at 30, the rest at 35, or whatever structure fits.
Second, a beneficiary receiving needs-based public benefits. A direct inheritance can disqualify someone from Medicaid or SSI until it's spent down. A properly drafted special needs trust holds the money and pays for things the benefits don't cover without counting as the beneficiary's resource. This one is not a do-it-yourself project. The drafting rules are specific and getting them wrong defeats the purpose.
Third, a blended family. Naming your current spouse outright means the money is theirs, and what happens to it after they die is up to them. A trust can provide for your spouse during their life and direct what's left to your children from a prior marriage. Without it you're relying on everyone getting along after you're not there to help.
Fourth, an adult beneficiary who shouldn't receive a lump sum. Addiction, a bankruptcy, a creditor problem, a marriage you have concerns about. A trust with a spendthrift provision keeps the money out of reach of creditors and releases it on a schedule.
The costs are real. Drafting runs into the low thousands with an estate attorney, the trust may need its own tax return, and trust tax brackets compress fast, hitting the top rate at a few thousand dollars of retained income. Income distributed to beneficiaries is taxed to them instead, which is usually the better path, and it's a conversation for your CPA.
One structural warning. An irrevocable life insurance trust that owns the policy is a different tool from a revocable trust named as beneficiary. The first is about keeping the death benefit out of your taxable estate and it involves giving up control. The second is a set of instructions for how the money gets handled. People use the words interchangeably and they are not the same decision. I'm an insurance broker rather than an attorney, so the drafting belongs with an estate attorney either way.
Whichever way it goes, the beneficiary designation on file with the carrier is what controls. A trust document that says one thing and a beneficiary form that says another gets settled by the form. Check the form.