By Ilya Lyubimskiy, JD, CPA | Estate Planning & Probate Attorney and Author of I Wish I Talked to You Sooner
A will and a revocable living trust can both direct what happens to your property, but they do not work the same way. Understanding the nuances and differences with a Will vs. Trust is an important question to consider when building your estate plan. And for many people, the answer is not choosing one or the other. It may be using both as parts of the same estate plan.
That surprises people.
One of the most common questions I hear as an estate planning and probate attorney is some version of: “Do I need a will or a trust?”
It is a reasonable question, but it assumes these documents are competing products.
They are not.
A will and a revocable living trust serve different purposes, operate differently, and can complement each other. The better question is not necessarily “Which document is better?”
It is:
“What do I want my estate plan to accomplish, and which tools will accomplish those goals?”
What Does a Will Do?
A will is a legal document that provides instructions for what should happen to certain property after your death.
Among other things, a will can identify who should receive probate assets, nominate the person who will administer your estate often called a personal representative (a/k/a executor) and nominate guardians for minor children.
That makes a will an extremely important estate planning document.
But there is one distinction people frequently miss:
A will does not avoid probate.
The will provides instructions that are generally carried out through the probate process. Probate is the legal process through which a court recognizes the will, appoints the appropriate representative, and allows the estate to be administered.
As I explain in I Wish I Talked to You Sooner, a will guides the probate process; it does not bypass it.
That does not make a will bad.
It simply means you should understand the job the document was designed to perform.
What Does a Revocable Living Trust Do?
A revocable living trust works differently.
It is created during your lifetime and can hold and manage property transferred into it. In a typical revocable trust arrangement, the person creating the trust can remain in control of the trust property while alive and retain the ability to amend or revoke the trust. The American Bar Association similarly defines a revocable living trust as one created and funded during life that the creator retains the power to amend or revoke.
The trust also identifies who should take over management if the original trustee can no longer serve and explains how trust property should eventually be distributed.
For assets properly transferred into the trust, one of the major advantages is that those assets can generally be administered outside of probate. Avoiding probate depends on assets actually being transferred into the trust during the owner’s lifetime.
That last part matters.
Simply signing a trust does not automatically move everything you own into it.
We covered that problem separately in “You Created a Trust. Did You Actually Fund It?” because trust funding is important enough to deserve its own discussion.
So What Is the Biggest Difference Between a Will and a Trust?
For most consumers, several practical differences matter.
A will generally becomes operative after death and provides instructions through the probate system.
For purposes of this discussion, when I refer to a trust, I am talking primarily about the revocable living trust commonly used in everyday estate planning.
A revocable living trust can operate during your lifetime, including during periods of incapacity, and can continue after your death. For property properly held in the trust, administration can generally occur privately without putting those particular assets through probate. The trust acts like a container for assets.
That makes trusts attractive to people concerned about continuity, privacy, probate avoidance, or more structured management of inherited assets.
But it does not mean everyone automatically needs a trust.
Does Everyone Need a Revocable Living Trust?
No.
There is no universal estate plan that is right for every person.
Someone with relatively simple assets, appropriate beneficiary designations, straightforward family circumstances, and little concern about probate may determine that a will-based plan accomplishes what they need.
Someone else may own real estate in multiple states, have a blended family, want more privacy, want greater continuity during incapacity, or want assets managed for beneficiaries over time. A revocable living trust may be considerably more attractive in those circumstances.
Even the American Bar Association cautions against assuming that avoiding probate is automatically necessary in every situation; the usefulness of a revocable trust depends in part on the complexity of the estate and the applicable probate system.
Estate planning is not about collecting the maximum number of documents.
It is about choosing documents that solve the problems you actually have.
If You Have a Trust, Do You Still Need a Will?
This is where the “will versus trust” question really falls apart.
If your estate plan uses a revocable living trust, it still makes sense to have a will.
In a trust-based estate plan, that will often serves as a backup and is commonly called a pour-over will.
Imagine that you created and properly funded your trust, but years later you acquired an asset and forgot to transfer it into the trust.
A pour-over will can direct that probate asset into the trust after your death.
The will can provide the path to the trust, but the property may still have to go through probate to get there. That is exactly why the book describes a pour-over will as a safety net, rather than a substitute for properly coordinating assets with the trust.
A Trust Does Not Replace Everything a Will Can Do
There is another reason the will remains important.
Certain functions traditionally belong in the will.
For parents of minor children, one of the most important examples is nominating a guardian.
A trust may provide detailed instructions about how money should be managed for children, but it does not simply replace the will’s role in nominating who should care for them.
This illustrates a broader point:
Estate planning documents work together.
Thinking of the trust as the “upgraded version” of a will oversimplifies the relationship between them.
Which One Gives You More Privacy?
A revocable living trust can provide greater privacy for assets administered through the trust.
Probate is a court process. When a will is filed as part of probate, it generally becomes part of the court record. A properly administered trust, by contrast, generally operates outside that public probate proceeding.
Privacy is one of the reasons some families prefer trust-based planning, particularly when they do not want the details of the estate administration easily available through a court file.
The book emphasizes this distinction between a will operating through the court system and a revocable trust functioning as a private set of instructions for trust property.
Privacy may be very important to one family and almost irrelevant to another.
Again, the right planning tool depends on the goal.
What About Incapacity?
This is one of the most important differences and one that is easy to overlook.
A will is fundamentally a death-planning document. It does not give someone authority to manage your property simply because you become incapacitated while you are alive.
A properly structured and funded revocable living trust can provide continuity in the management of trust assets if a successor trustee needs to step in.
That does not eliminate the need for powers of attorney or healthcare documents. Assets and decisions outside the trust may still require those separate forms of authority.
But it demonstrates why estate planning is about much more than deciding who inherits your property.
A good plan should also consider what happens if you are alive but unable to manage things yourself.
Does a Trust Save Estate Taxes?
Not simply because it is a revocable living trust.
This is another misconception worth clearing up.
A standard revocable living trust is generally not an estate-tax avoidance device. Because the creator retains substantial control over a revocable trust during life, the property generally remains part of the creator’s estate for federal estate-tax purposes. The ABA specifically notes that a revocable trust does not itself avoid estate tax for this reason.
There are many other types of trusts used for tax, asset-protection, charitable, and specialized planning purposes.
But those are different tools.
What About Assets With Beneficiaries?
Neither your will nor your trust should be viewed in isolation.
Retirement accounts, life insurance, transfer-on-death accounts, jointly owned property, and other assets may pass according to beneficiary designations or ownership rules rather than through your will.
That is why someone can have an excellent will and still end up with an estate plan that produces an unexpected result.
We explored that issue in “Can a Beneficiary Designation Override Your Will?”
The takeaway is simple:
Your estate plan is not just your will.
And it is not just your trust either.
It is the complete system created by your documents, ownership, beneficiary instructions, and the people you have chosen to carry everything out.
Will or Trust? Start With the Goal
Instead of beginning with “Which document should I buy?” begin with what you want your plan to accomplish.
If your primary goal is to establish basic inheritance instructions, nominate the people who should administer your estate, and nominate guardians for children, a will is an essential starting point.
If you also want to reduce probate exposure for appropriately transferred assets, increase privacy, provide continuity during incapacity, or create more structured management of property, a revocable living trust may deserve serious consideration.
And if you choose a trust-based plan, the answer is commonly not will or trust.
It is will and trust, with each document performing a different job.
The Better Question Is Whether Your Plan Works Together
I have seen people become overly focused on the names of estate planning documents.
“Do I need a will?” “Should I get a trust?”
Those questions matter, but they are not where the analysis should end.
A beautifully drafted trust that was never funded can fail to accomplish one of its main objectives.
A carefully written will can be undermined by an outdated beneficiary designation.
A trust cannot make healthcare decisions for you.
A will cannot manage your finances while you are incapacitated.
No single document does everything.
That is one of the recurring lessons in I Wish I Talked to You Sooner: How to Avoid the Worst Estate Planning Mistakes. Estate planning works best when we stop thinking about documents as isolated products and start thinking about how the pieces operate together in real life.
Learn more about I Wish I Talked to You Sooner and how to avoid the estate planning mistakes families too often discover when it is already too late.
About the Author
Ilya Lyubimskiy, JD, CPA, is a Colorado estate planning and probate attorney, Certified Public Accountant, and founder of Premier Legacy Law. He is the author of I Wish I Talked to You Sooner: How to Avoid the Worst Estate Planning Mistakes. Through his legal practice, he helps individuals and families navigate estate planning, probate, and trust administration with an emphasis on practical planning and avoiding preventable problems.
