Living Trust v. Will

Learn the difference between a living trust and a will.

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What is the difference between a revocable living trust and a will? And which should you make?

Revocable living trusts and wills both allow you to name beneficiaries for your property. Beyond that, they are useful for different purposes.  For example, most people use living trusts to avoid probate.  But living trusts are more complicated to make, and you can’t use a living trust to name an executor or guardians for your children. You need a will to do those things.

Living Trusts and Wills, Compared

Here is a quick comparison of what wills and living trusts can do.  Read below for details about each characteristic.

 

 

Revocable Living Trusts

Wills

Name beneficiaries for property

X

X

Leave property to young children

X

Maybe (see below)

Revise your document

X

X

Avoid probate

X

 

Keep privacy after death

X

 

Requires a notary public

X

 

Requires transfer of property

X

 

Protection from court challenges

X

 

Avoid a conservatorship

X

 

Name guardians for children

 

X

Name property managers for children’s property

 

X

Name an executor

 

X

Instruct how taxes and debts should be paid

 

X

Simple to make

 

X

Requires witnesses

 

X

Reduce estate taxes

-

-

Leave money to pets

-

-

Leave final wishes

-

-

Leave passwords for online accounts

-

-

 

Name beneficiaries for property. The main function of both wills and trusts is to name beneficiaries for your property. In a will, you simply describe the property and list who should get it.  Using a trust, you must do that and also “transfer” the property into the trust. (See “Transfer of property into the trust,” below.)

Leave property to young children. Except for items of little value, children under 18 cannot legally own property.  When you leave property to a minor, that property must be managed by an adult – at least until the child turns 18.

When leaving property to a minor using a living trust, the trustee manages the property until the child reaches an age determined by you.

When leaving property to a minor using a will, you should name an adult to manage the property. Or,  use your will to set up a testamentary trust for young children or name a custodian under the Uniform Transfer to Minors Act.  For more about these, read Leaving an Inheritance for Children, on Nolo.com.  If you do not name an adult to manage property left to a minor through your will, the court will name someone to do it after your death.

Revise your document.  With both revocable living trusts and wills allow you to revise your document when your circumstances or wishes change.  The decisions you make in these documents are not set in stone until you die. 

(On the other hand, irrevocable living trusts cannot be changed after they are finalized.  These are usually used by the wealthy to shelter money from taxes and are much more complicated than the revocable type. See a lawyer if you want to make an irrevocable living trust.)

Avoid probate. Property left through a living trust does not pass through probate. Property left through a will does go through probate.

Probate is the court system designed to wrap up a person’s affairs after their debts.  Probate takes a long time, can be very expensive, and for most estates, isn’t necessary.  Read more about avoiding probate in Why Avoid Probate? on Nolo.com.

Because all property passing through a living trust does not have to go through probate, it can be distributed to beneficiaries after the death of the grantor, without any fees or interference (or guidance) from the court  For this reason, many people chose to create a living trust. Read more about How Living Trusts Avoid Probate on Nolo.com

But not everyone needs to avoid probate.  If you don’t own much property, or if you have many debts, creating a trust may not be necessary.  See, “Do I Need a Will or a Living Trust,” below.

Privacy after death. After death, a will becomes a public document.  A living trust does not, so many people choose to use a living trust to keep their affairs private.  Read more about this in Is a Living Trust Public? on Nolo.com.

Notary public. Unlike wills, living trusts must be signed and stamped by a notary public.  See “Witnesses,” below to learn the steps required to finalize a will.

Transfer of property into the trust. To leave property through a living trust, you must transfer the property into the trust. For many items, this is as easy as making a list of the property and attaching to the trust document. However, items with title documents, such as real estate, must be retitled so that the owner of the property is the trust.  This is not usually complicated or particularly difficult, but it is an extra step that you must take.  No transfer of property is required when using a will.

Protection from court challenges. Court challenges to wills and living trusts are rare. But if there is a lawsuit, it's generally considered more difficult to successfully attack a living trust than a will.  Read more about this in Other Advantages of Living Trusts on Nolo.com. 

Avoiding a conservatorship. In a living trust, you can name your spouse, partner, child, or other trusted person to have authority over trust property if you become incapacitated and unable to manage your own affairs.  You cannot do this with a will, however you can also make a durable power of attorney to appoint someone to manage your finances. Read more about this in Other Advantages of Living Trusts on Nolo.com. 

Guardians for children. In a will, you can name guardians to care for minor children. You cannot do this in a living trust. Read more about Guardianships for YourChildren on Nolo.com.

Property managers for children’s property. In a will, you can name someone to manage any property left to or earned by your children. You cannot do this in a living trust. 

Naming an executor. You can use your will to name an executor who will be in charge of wrapping up your estate after you die.  That person will be responsible for communicating with the court, paying your bills, and, eventually, distributing any property that goes through probate. You can’t name an executor in a living trust.  In your living trust, you name a successor trustee who will manage just the property left through the trust. Because most estates will need an executor to some extent, it makes sense to make a will and name an executor, even when you leave most of your property through a trust. In most cases, it also makes sense to name the same person for both jobs.

Learn more about an executor’s job in Nolo’s Executor FAQ.

Instructions for taxes and debts. In your will, you can leave instructions about how you want debts and taxes to be paid.  For example, you can say that you want to pay the loan from your brother to be paid from your savings account. You can also use your will to forgive debts owed to you.  You should not do these things with a living trust.

Ease of creating the document. Wills are simple documents that require no special language.  They must be witnessed by two people and signed by the will maker. Wills created by attorneys may be complex and nuanced, but there is nothing in the law that requires them to be.  In some states, even handwritten wills are acceptable.  

Similarly, there are no laws that require living trust to be complicated. However, because a living trust document must cover the trustee’s duties, they tend to be more complex. Also, instead of witnesses, you must have a notary public sign the document. Finally, trusts are more involved to make because they require that you transfer property into the trust, see “Transferring property into the trust,” above.

Requires witnesses. Wills must be witnessed by two people who will not receive anything under the will. Including a self-proving affidavit with your will may make it easier to get through probate, and those must be notarized.  Read more about executing a will and using a self-proving affidavit in Executing a Will on Nolo.com.

What Living Trusts and Wills Cannot Do

Reduce estate taxes.  Neither wills nor can living trusts help you reduce estate tax, but most estates will not owe estate tax.  Learn more about whether your estate might be liable for Estate Tax on Nolo.com.

Leave money to pets. Pets cannot own property, so you cannot leave money to your pets. You can use your will to leave your pets to a trusted caretaker, or you can create a pet trust. But if you try to leave your pet property, that property will end up in your residuary estate.  Learn more about Strategies for Taking Care of Pets on Nolo.com.

Leave final wishes. Although it is permissible to leave funeral instructions and other final wishes in your will (never in a living trust), it’s better to leave them in a separate document.  Read more in Nolo’s Final Wishes FAQ.  

Leave passwords for online accounts.  After you die, your executor will appreciate being able to access your online accounts, computers and other devices.  However, do not leave this information in your will or living trust.  Instead, create a separate document and keep it in a secure place with your other estate planning documents.  Read more in Access to Online Accounts on Nolo.com.

Do I Need a Will or a Living Trust?

Most people need a will, but not everyone needs a living trust.  Whether or not you need a living trust depends on your age, how wealthy you are, and whether you’re married.  Read more about Why You May Not Need a Living Trust.

Even if you decide that you need a living trust, you should also make a will to name an executor, name guardians for minor children, and take care of any property that doesn’t end up in your trust.  Read more about why You Still Need a Will on Nolo.com.

What If I Don’t Have a Will or Living Trust?

If you don’t make a will or a living trust, your property will be distributed according to the laws of your state.  Learn more about Intestate Succession on Nolo.com.

To learn more about wills, go to the Wills section of Nolo.com.

To learn more about living trusts, go to the Living Trusts section of Nolo.com.

To learn more about estate planning, go to the Wills, Trust & Probate section of Nolo.com.

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