Living Trust vs Will: Which is right for you?

If you’re like most people, you want to make things easier for your family when you pass away. There may not be much you can do to lessen the grief and emotional pain, but there’s a lot you can do to make the distribution of your estate smoother. Two common options are a living trust and a will, also known as a Last Will and Testament. Trusts vs. wills each have their pros and cons – let's take a closer look. 

The terms “living trust” and “revocable trust” are interchangeable. This article will refer to a trust that can be amended or revoked by someone as a living trust (but to call it a revocable trust would also be correct, and you’ll find that many advisors and estate planning attorneys will use the term “revocable trust” more often than not).

What's the difference between a living trust and a will?

A Last Will and Testament is the testamentary document that directs who receives your property, appoints an executor for your estate and names guardians for minor children. A will has no effect, and an executor has no authority to act, until it has been validated by a probate court following your death.

A living trust is a legal arrangement you create during your lifetime to hold assets, manage them and then distribute them at your passing, according to your instructions. You keep control and can change or revoke the trust at any time, and you name a successor trustee to step in at death or incapacity. The successor trustee has authority to act immediately upon your passing.

So, both tools distribute assets and both can be easily changed or revoked while you’re alive, but a living trust can give your fiduciary faster access to funds, while a will is subject to a probate proceeding and can also fulfill other functions like naming guardians.

Living trust overview

How a living trust works

With a living trust, you name a successor trustee who will take over when you pass away (or if you become incapacitated). You set up the trust and generally make yourself the trustee (who controls the assets in the trust) and the beneficiary. Then you retitle your assets into the trust – i.e., the trust now owns them, although since you control the trust (you are the grantor, trustee and beneficiary), nothing has really changed from a practical standpoint.

When you die, your successor trustee has access to cash and other assets, can settle your estate and distribute your assets according to your instructions, without having to first probate your will.

While a living trust is among the simplest of trusts, no trust is “simple,” and the cost to set one up will probably initially be higher than drafting a will – but keep in mind that a probate proceeding has associated costs that can reduce what your heirs receive, too.

Advantages of a living trust

• Can help avoid probate
• Provides quicker access to cash to pay bills and other expenses of administration
• Provides privacy

Disadvantages of a living trust

• Potentially higher upfront cost and administrative setup
• Requires asset retitling
• Doesn’t totally replace the need for a will – keep reading to learn why

Will Overview

How a will works

A will is a legal document that controls who gets what after your death, names your chosen executor to oversee the distribution and can appoint guardians for minors.

Advantages of a will

• Simpler and potentially less expensive to establish than a trust
• No asset titling is necessary

Disadvantages of a will

• A probate proceeding is necessary to validate the document 
• The document becomes a public record at your passing
• Generally takes longer for the executor to access cash and other assets

Living trust vs will: Side by side comparison

Do you need both a will and a living trust?

Everyone should have a will, and we’ll explain why. Not everyone needs a living trust. You may not need one if, for example:

• You live in a state that has simplified probate processes for these estates
• You want everything to go to your spouse or another single, adult heir
• All your assets are non-probate assets (retirement accounts, life insurance and jointly titled real estate and bank accounts, for example)

If these apply to you, the cost to set up a living trust may not be worth it for the more limited benefits your heirs will gain.

That said, are there scenarios where a living trust is better than a will? There can be. They include:

• You live in a state where probate is especially costly or slow
• You own real property in multiple states (each state otherwise needs its own probate proceedings)
• You operate a business that needs to keep running without waiting on court appointments
• You have a blended family or complex family dynamics

Why do I need a will if I have a living trust?

So, why do you still need a will if you have a living trust? While a living trust is often called a “will substitute,” the truth is that it doesn’t completely replace your will. You still need:

• A will that names guardians for minor children, if applicable
• A “pour-over will” that sweeps any missed probate-subject assets into your trust at your death, just in case

Aligning your estate plan with your financial goals

If you care about privacy, speed and minimizing court involvement, consider pairing a living trust with your will. If your estate is very simple and mainly includes non‑probate assets, a well‑drafted Last Will and Testament alone may be enough.

Either way, remember to review your plan regularly as your financial and family circumstances evolve.