Living Trust vs Will: Which One Do You Need?

April 28, 2024

When clients ask whether they should sign a revocable living trust or a last will and testament, the honest answer is that both tools are useful—they simply solve different problems. A will appoints your executor, names guardians, and directs your residuary estate through probate. A living trust provides incapacity planning, keeps trust‑titled assets out of probate, and can streamline distributions with greater privacy. This article explains living trust vs will in plain English so you can choose the right combination for your situation.

What a will does well (and its built‑in limits)

A state‑specific will is the foundation for most Americans. It:

Appoints an executor (and alternates) to gather assets, pay valid debts and taxes, and distribute what remains under court supervision.
Directs specific gifts (cash, heirlooms, a particular brokerage lot) and the all‑important residuary estate (“everything else”).
Lets parents nominate guardians for minor children and, if they choose, create a simple trust for minors with a separate trustee.
Handles personal effects and can name charitable beneficiaries.

But a will has two predictable limits:

Probate is generally required for property titled solely in your name. Probate is administrative, not scary, but it is public and takes time.
A will does not control non‑probate assets—anything passing by beneficiary designation (401(k), IRA, life insurance), TOD/POD registration, or through an existing revocable living trust. Those transfers occur outside the will.

What a revocable living trust does better

A revocable living trust is a management vehicle you control during life and after your death through the instructions you write today. Its strengths:

Avoid probate for trust‑titled assets. When your property is already in the trust, your successor trustee can sell, pay bills, and distribute without waiting on the probate court’s docket.
Incapacity planning. If you become unable to manage finances, your successor trustee steps in immediately, usually with a one‑page certificate of trust for banks and brokers.
Privacy. Probate filings are public; trust administration is typically private.
Distribution control. You can add spendthrift protections, staged ages, or special instructions without extra court oversight.

A living trust does not automatically reduce estate taxes or insulate assets from your own creditors during life (it’s revocable; you retain control). Its value is practical: continuity, speed, and privacy.

Why many people sensibly use both

Even with a trust, you still sign a pour‑over will. The pour‑over will appoints an executor and instructs that any assets left in your name at death be poured into your trust. It also carries your guardianship nominations—trusts move property; wills nominate people. Together, a trust plus pour‑over will create a “no‑loose‑ends” plan: the trust handles most assets; the will catches stragglers and covers guardianship.

The difference in what your family experiences

With will‑only planning: Your executor petitions the court, obtains authority (letters testamentary), publishes creditor notices, inventories assets, potentially sells the home under court timelines, and distributes once claims and taxes are handled. In straightforward cases, this can still be smooth; it’s simply slower and more public.

With a funded living trust: Your successor trustee starts immediately—paying the mortgage, selling or maintaining property, filing taxes, and distributing per the trust—without probate for trust assets. If you funded properly, the court has little to do.

Funding: the make‑or‑break step for trusts

A trust works only if you fund it. Funding means:

Recording a deed to trust for real estate (home, rental, vacation).
Retitling non‑retirement brokerage accounts and, optionally, bank accounts.
Assigning personal property into the trust.
Coordinating beneficiary designations for retirement and life insurance (often to individuals; sometimes to the trust for minors or special needs).

If you skip funding, your trust is a beautiful car with no fuel. Your pour‑over will can still route unfunded assets into the trust at death—but that portion may pass through probate first.

When a will‑only plan is “enough”

A will‑only plan can make sense if you have:

Simple assets (no multi‑state real estate; modest accounts) and
Low tolerance for any administrative steps today, and
No strong desire for privacy or speed after death.

You will still get a valid, court‑respected roadmap—just expect a probate timeline rather than private trust administration.

When adding a living trust is smart

Choose a trust if you value:

Probate avoidance for real estate and investment accounts,
Incapacity continuity without court guardianship,
Privacy around asset values and beneficiaries,
Multi‑state simplicity (real estate in more than one state often triggers ancillary probate that a trust avoids), or
Distribution controls (e.g., spendthrift protections, staged ages for young adults).

Example scenarios (lawyer’s shorthand)

Scenario A: Young family, one home, retirement accounts with beneficiaries.
A will naming guardians and a simple minors’ trust may be enough—especially if most wealth is in beneficiary‑designated retirement plans. Add a living trust if you want privacy and to avoid probate for the home.

Scenario B: Retired couple, home + brokerage, travel frequently.
A living trust shines: incapacity coverage, straightforward management if one spouse becomes ill, and probate avoidance for large accounts and real estate. Each spouse also signs a pour‑over will (guardianship not relevant, but the backstop is helpful).

Scenario C: Blended family, adult children on both sides, two properties (different states).
A trust (often two trusts or a carefully drafted joint trust) gives control and clarity: protect each side’s intended heirs, avoid ancillary probate, and reduce conflict.

Costs, effort, and maintenance

Will‑only: Faster to set up; more court involvement later. Updates via codicil or new will are simple.
Living trust + will: Slightly more work now (funding deeds and accounts), less court later. Update via trust amendments and, if needed, a refreshed pour‑over will.

Both approaches need periodic review after marriage, divorce, birth, a move across state lines, home purchase/sale, or major inheritances. Always align beneficiary designations with your documents.

Myths to ignore (briefly)

“Trusts are only for the wealthy.” No. They’re for people who want privacy, speed, and incapacity planning.
“A trust eliminates all taxes.” A standard revocable trust does not by itself reduce federal estate or income taxes.
“If I have a trust, I don’t need a will.” You still need a pour‑over will (and guardianship nominations if you have minors).

A simple decision framework

List goals: guardianship, privacy, probate avoidance, incapacity coverage.
Check assets: real estate (especially in multiple states), non‑retirement brokerage, retirement accounts, life insurance.
Choose the tool:
- If probate avoidance and privacy matter → add a revocable living trust.
- If your facts are simple and you’re indifferent to probate → a will may suffice.
Follow through: If you create a trust, fund it. If you rely on a will, keep it state‑specific and execute with two witnesses and a self‑proving affidavit where available.