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Wills vs. Trusts – What’s the Difference?


Dying intestate — without an estate plan — leaves behind a nightmare for your loved ones. It ties them up in probate court trying to sort out your estate, often for years. That legacy of chaos and contention is the last thing most of us want to leave behind.

That means you need to create detailed legally binding instructions for your estate in the form of a will or living trust. But which do you need? Or should you have both?

For layfolk, the differences quickly start feeling esoteric and unnecessarily complicated. The good news is that you can start simple and gradually add layers of complexity as you need them and as your wealth and estate grow.

Wills vs. Trusts: What’s the Difference?

Put simply, wills spell out your wishes after you die. That includes distributing your assets to your heirs of course, but it can also include your funeral wishes, the care of any minor children or pets, organ donation, and who you name as the executor of your estate. 


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Trusts get more complicated. There many different types of trusts, each of which serves a different purpose. Most relevantly here however are revocable living trusts, which can serve a similar role as your will. 

The big difference? Assets distributed by living trusts don’t have to go through the probate process. Instead, you simply name a successor trustee to distribute your assets directly to your beneficiaries. This trustee serves a similar function as an estate’s executor.

Because your assets don’t have to transfer into your estate, and the process doesn’t need oversight from a judge, your trustee can simply transfer ownership directly from your trust to your heirs. That makes the legal process move much faster. Instead of months or even years, the distribution of your estate can take place in just weeks.

Living trusts maintain privacy, as the trust assets don’t enter public record via probate. That reduces the odds of non-heirs coming forward to attempt to claim money or property. Your trustee can quietly approach each heir and deliver their inheritance with no fanfare or court appearances.

Beyond the veil of privacy, living trusts come with other inherent protections against court challenges. The laws governing them make them less open to challenge compared to wills.

You can also set up niche types of trusts for specific purposes. For example, you can create a charitable trust to distribute some of your assets to charities, or testamentary trusts to create trust funds for your children, or irrevocable trusts for asset protection

At a glance, the main differences between trusts and wills can be summed up as:

Wills Trusts
Effective Date After death Immediately after signed and funded
Avoids Probate No Yes
Preserves Privacy No Yes
Provides Guardianship for Minor Children & Pets Yes No
Complexity & Cost Simple process, costing up to $1,000 depending on the complexity and size of the estate and whether you use an online service or hire an attorney. More complex process, more paperwork, more cost. Expect to pay at least $1,500 – $3,000. 
Contestability Greater odds of being challenged Better protection from being challenged, as trusts are ongoing
Protection During Incapacity No Yes
Precedence Typically second to trusts Generally take precedence over wills
Tax Benefits None Revocable trusts: None. Irrevocable Trusts: Yes.
Asset Protection from Creditors None Revocable trusts: None. Irrevocable Trusts: Yes.

The Verdict: Should You Create a Will or a Trust?

Both wills and trusts dictate what happens to your belongings after you kick the bucket. But there are plenty of differences between the two, and different documents make sense depending on your circumstances. 

Because trusts are more complex and expensive, most people avoid them if they don’t need them.

You Should Create a Will If…

Most people should have a will. Wills let you outline a broader set of wishes, such as who should take over raising your minor children, and your funeral arrangements. 

The question is whether a last will document alone is sufficient, or whether you should also have a living trust. A standalone will is a better fit if:

  • You Have an Average Net Worth. “Joe Six Pack” doesn’t need a fancy living trust. A simple will stating who should receive his car and baseball card collection will do the trick, without costing him a bunch of time and money and hassles with attorneys. 
  • You Aren’t Worried About Estate Taxes. Likewise, the lifetime gift and estate tax exemption remains high at the moment, at $12.06 million. So people with average net worths don’t need to worry about minimizing estate taxes.
  • You Aren’t Worried About Asset Protection Either. If you don’t work in a litigious industry and aren’t worried about bottom-feeders coming after your money, you also probably don’t need to worry about protecting your assets with an irrevocable trust. 
  • You Don’t Expect Contention Over Your Estate. If you have two kids from a single marriage and you don’t expect them to argue over who gets your “Starry Night” print, you probably don’t need to avoid probate with a living trust.
  • You Don’t Want to Create a Trust Fund. If your children are functioning adults, you probably don’t need to create trust funds to manage your inheritance over many years.

You Should Create a Trust If…

Consider creating a trust if:

  • You Have a High Net Worth. If you have a net worth over a few hundred thousand dollars, you should start considering a living trust. When you join the two-comma club, you should really start taking the idea seriously. Beyond potentially saving taxes for your heirs, your estate gets more complicated as you add more and different types of assets. 
  • You Worry About Lawsuits. You can use trusts to protect your assets from lawsuits. Certain professions fall prey more commonly to lawsuits than others, such as doctors and real estate investors, so assess your risk and get legal advice from an asset protection specialist if you worry about it. 
  • You Have a Complex or Contentious Family. If you had children with several spouses, or if your children bicker at the least provocation, you probably want to avoid probate. A living trust reduces the odds of family members coming out of the woodwork to squabble over your estate in probate court. 
  • You Want to Exclude Specific People From Your Estate Plan. With a trust, it’s harder for disinherited family members to call the distribution of your assets into question by claiming you were incapacitated. 
  • You Want to Create a Trust Fund. You can use trusts to create ongoing funds to provide for your children. That could include minor children, children with special needs who need lifelong care, or heirs who you just know would squander their inheritance if they receive it all at once. 

Both Are Great If…

Yes, you can have both a will and a trust. In fact, in most cases you need a will no matter what, even if it’s just a “pourover” will that funnels all unstated assets into your living trust. 

You should create both if you meet the criteria for a living trust and: 

  • You Have Minor Children or Pets. If you need to specify who should care for your minor children or pets after you pass, use a will in addition to your living trust. 
  • You Have Strong Feelings About Your Final Arrangements. Some people don’t care what happens to their “meat sack” after they shuffle off this mortal coil. Others care deeply. If you’re one of the latter, use a will to spell out your final wishes. While you’re at it, consider setting a total cost limit for your funeral, so funeral directors don’t upsell your grieving children out of their inheritance. 
  • You Have Strong Feelings About Organ Donation. A last will and testament is the appropriate legal document to dictate your organ donation preferences. 

Final Word

Virtually every adult should have a will to cover their estate planning basics

When you’re young and broke, a will by itself suffices. You can spell out in broad terms who you want to receive your (few) worldly possessions, and who should take care of Fido. 

But as your net worth grows, your estate gets more complicated. And let’s be honest, more tempting for erstwhile family members to step in and claim they deserve a piece of the action. 

You can start with an online will or trust through a company like Trust & Will, LegalZoom, LawDepot, or Nolo. But the bigger and more complex your estate gets, the more you should think about hiring an estate planning attorney. Death and taxes aren’t just inevitable — they’re also fraught with overly complicated laws. 

Remember that you can and should update your estate plan frequently. That means at least every few years, and definitely every time you make a major life change such as having a child, getting married or divorced, or buying a major asset such as a home. 



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