Trust vs. Will: Do You Need Both?

When you start planning your estate, you might wonder if you need a will, a trust, or both. Each one helps you pass on your property, but they work in different ways and have their own pros and cons.

We’ll focus on living trusts here, since that’s the type most people need to know about when planning their estate. We’ll explain the main features of both living trusts and wills, compare how they work, and help you decide if you need both or just one.

What Is a Will?

A will is a straightforward legal document that allows you to specify how your property should be distributed after you die. In addition to distributing your property, a will can also:

• Appoint guardians for young children.
• Provide care arrangements for pets.
• Name an executor to wrap up your estate.
• Forgive outstanding debts.
• Provide instructions for paying debts and taxes.
• Serve as a backup for a living trust.

After you die, the executor settles your estate and distributes your assets as you directed. This process, called probate, is managed by a court and can be lengthy and expensive.

How Does a Will Work?

A will takes effect only after your death. You can change or cancel it at any time, as long as you have the mental capacity to do so. Every will must go through probate, which typically involves the following steps:

1. Putting the will on file. After you die, the person who has the will submits it to the probate court.
2. Appointing an executor. The court approves the executor named in your will, provided that person is willing and eligible to serve.
3. Identifying and gathering assets. The executor locates, inventories, and assesses the value of all of your property that will go through probate.
4. Handling debts and taxes. The executor settles any valid debts, pays estate expenses, and handles required taxes using estate funds.
5. Distributing property. The executor distributes the remaining assets to beneficiaries according to your will.

Probate can last over a year, and even longer if your estate is complicated. Because of these drawbacks, many people look for ways to avoid probate, including setting up a living trust.

Pros and Cons of Making a Will

To review the pros and cons of a trust vs. will, we’ll look at each in turn. Here are the main benefits and downsides of making a will.

Advantages of a Will

Easy to make. A will is almost always simpler and more affordable than a living trust.

Takes care of your kids. A will allows you to choose a guardian for your young children.

Provides clear directions. Your will can give detailed instructions for leaving your property, making things clearer for loved ones.

Covers all your property. A good will includes a residuary clause, which makes sure any property you own when you die, even things you acquired after signing your will, goes where you want it to.

Simple to change. As long as you have mental capacity, you may change or revoke your will at any time before you die.

Disadvantages of a Will

Requires probate. As noted earlier, most wills have to go through a long probate process. This is the main drawback of a will if you don’t use other probate avoidance methods.

Information is public. After filing with the court, your will and related documents usually become public record.

Doesn’t cover incapacity. A will does not allow anyone to manage your assets if you become incapacitated. For that, you’ll need other documents, like a durable power of attorney for finances.

What Is a Living Trust?

A living trust, like a will, lets you choose who gets your property. But that’s where the similarities mostly end. With a living trust, you pick a trustee to manage and distribute your property after you die, so you don’t need an executor or probate court.

How Does a Living Trust Work?

To better understand the difference between a will and a trust, let’s look at how a living trust typically works.

1. Creating the trust. You sign a trust document that lays out the terms, names you as the initial trustee, states who will take over as trustee when you can no longer serve, and designates your beneficiaries.
2. Putting property into the trust. You transfer ownership of your assets to the trust by retitling real estate, updating financial accounts, and assigning valuable property or business interests to the trust. This is called funding the trust.
3. Managing assets during life. As the initial trustee, you control the trust property. You can buy, sell, invest, or give away assets as you wish. You may change or revoke the trust at any time while you have mental capacity.
4. Managing assets during incapacity. If you become unable to manage your affairs due to illness or injury, your chosen successor takes over management of the trust assets without court involvement.
5. Handling property after you die. Your successor trustee uses the trust assets to pay any outstanding debts or expenses and then gives the trust property to your beneficiaries according to your instructions.

Because the trust owns your assets, your property can be passed outside of probate. This makes things faster, more private, and less costly for your loved ones. But if you don’t put assets into the trust, it won’t help—anything left in your name still goes through probate.

Pros and Cons of Making a Living Trust

When considering the advantages and disadvantages of a living trust, most people weigh the extra cost and effort of setting one up against the benefits of greater privacy and convenience.

Advantages of a Living Trust

Avoids probate. Assets in a properly funded living trust pass directly to your beneficiaries without court involvement.

Maintains privacy. Unlike a will, a living trust is not filed with the court, so your asset distribution and beneficiaries remain confidential.

Provides management if you’re incapacitated. If you become unable to manage your affairs, your successor trustee can step in and manage trust property without court intervention.

Flexible and revocable. You can change trust terms, add or remove assets, or revoke the trust entirely at any time while you have mental capacity.

Crosses state lines. If you own property in multiple states, having a trust can avert the need to carry out a probate proceeding in each one.

Disadvantages of a Living Trust

More expensive and complex. Setting up and funding a living trust usually costs more and takes more effort than making a will.

Must be funded. A trust only controls assets you transfer into it. Any property left in your name at death still requires probate.

Can’t name guardians or an executor. A living trust doesn’t allow you to appoint guardians for children or an executor for your estate, so you’ll still need a will for those purposes.

Ongoing management. After creating the trust, you must keep it updated as you acquire new assets or your wishes change.

Difference Between Living Trust and Will

Knowing the main differences between a living trust and a will can help you decide which is best for you. Below, we point out the key differences.

Effective date. A living trust becomes effective as soon as you sign and fund it. A will, on the other hand, only takes effect after you pass away and the court formally accepts it.

Cost and complexity. Making a will is usually simple and inexpensive, but your estate might end up paying a lot in probate costs later. Living trusts cost more and take more work to set up, but they can help you avoid probate costs.

Privacy. Once filed, a will becomes part of the public records. Living trusts are not filed with the court, so their terms and the distribution of your assets remain private.

Incapacity coverage. A living trust provides a built-in plan for incapacity: If you become unable to manage your affairs, your successor trustee steps in automatically. A will offers no such protection; a separate document is needed to cover incapacity.

Naming guardians. You can use only a will, not a trust, to legally name a guardian for young children.

Probate and asset transfer. Assets held in a funded living trust bypass probate entirely, allowing for quicker, private, and less costly distribution. Wills must be validated through probate, which can be time-consuming and expensive.

Flexibility. You can change or revoke a will or living trust during your life, so you can adapt your estate plan as your needs evolve.

Ongoing maintenance. Wills usually don’t need much updating. Living trusts may need additional changes as you acquire new assets or your plans change, because only trust assets skip probate.

Trust vs. Will: Which to Choose?

You might still be asking yourself, “Will or trust, which is better?” The answer depends on how big and complex your estate is, your situation, and your goals. Some people only need a simple will, while others find that using both a trust and a will works best for their family.

When a Simple Will Might Be Enough

A basic will is enough for many people. If your estate is small and your finances are simple, a will can record your wishes without extra trouble or cost. This is especially true if you own property in just one state and aren’t worried about probate. Many states have easier probate for small estates, which can save your loved ones time and effort. But what counts as a “small estate” depends on your state, so check your local rules.

Overall, if your situation is simple and you’d rather save on legal fees now than worry about possible delays for your heirs, a basic will is a good option.

When a Living Trust May Be Better

A living trust might be best if you want more privacy, want to make things easier for your family, or need a backup plan in case you can’t handle your own finances later. A revocable trust is especially helpful if:

• You want your loved ones to avoid the hassle, delays, and costs of probate.
• You own real estate in more than one state.
• You want details about your estate and who inherits what to remain private.
• You’d want to ensure someone you trust will handle your affairs if you become incapacitated, without needing court approval.

For many, the best approach is to use both a trust and a will. The trust handles most of your big assets, while a simple will (called a pour-over will) acts as a backup. It makes sure anything not in the trust is still managed as you want and lets you name guardians for your children.

When You Need Both a Living Trust and a Will

Even if you set up a living trust, you probably still need a will. A pour-over will acts as a safety net, making sure any property not moved into your trust during your life is handled according to your wishes after you die. And only a will lets you legally appoint guardians for your minor children.

If you set up a living trust and don’t have a will, any assets left outside your trust could end up being distributed under your state’s default inheritance laws, which might not reflect what you actually want. In short, while your trust handles the bulk of your estate, a will fills in the gaps and ensures your overall plan is complete and tailored to your needs.

Making the Right Choice for Your Estate Plan

Wills and living trusts are both important parts of a full estate plan. When you know what each one does well and where it falls short, you can pick the right tools to protect your loved ones and make sure your wishes are followed. For many, using both a trust and a will gives the best mix of flexibility, privacy, and peace of mind.

You can find out more about making WillMaker’s will and living trust in WillMaker’s Legal Manual.