Living Trust vs. Will

The will and the living trust are two estate planning documents that people use to give their property away after death. But what is the difference between a revocable living trust and a will? And which should you make?

What Is a Will?

A will is a relatively simple document in which you state what should happen to your property after you die. You can also use your will to name guardians for your young children, name an executor, forgive debts, and designate how to pay your taxes. After your death, your executor pays any debts or taxes and sorts out who gets what based on the terms of your will. This court-supervised and highly structured process is called "probate" and has a reputation for being drawn out and expensive.

What Is a Living Trust?

Like a will, a living trust is a document you can use to name beneficiaries for your property. Beyond that, however, the two documents are distinct. The main feature of a living trust is that it appoints a trustee to manage and distribute trust property after your death. The trustee takes the place of the executor and the probate court.

Property that passes through a living trust doesn't go through probate, which can save your loved ones time and money. Many people make living trusts specifically to avoid probate. On the downside, living trusts are generally more complicated and expensive to set up and maintain. You can't use your living trust to name an executor or name guardians for young children, so even if you have a living trust, you still need a will to do those things. In fact, most people who make a living trust have a will as well.

Difference Between a Living Trust and a Will

Here is a chart with a quick comparison of the characteristics of wills and living trusts. See below for a detailed discussion of each item in the chart.

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 can't 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. If you don't 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. 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 aren't set in stone until you die.

(On the other hand, you can't change an irrevocable trust after you finalize it. Wealthy people and institutions typically use irrevocable trusts to shelter money from taxes or creditors, and irrevocable trusts 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 doesn't 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 death. 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?

Because all property passing through a living trust doesn't 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 choose to create a living trust. Read more about How Living Trusts Avoid Probate.

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

Keep 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?

Requires a notary public. State laws for the requirements for executing a will or trust vary. Generally, a trust should be notarized, and a will doesn't need a notary public (but should have two witnesses). With that said, most states allow a will to be self-proving if it's notarized. A self-proving will makes probate easier because the court generally won't require the witnesses to appear if the will is self-proving.

Requires transfer of property before death. To leave property through a living trust, you must transfer the property into the trust while you're alive. For many items, this is as easy as making a list of the property and attaching it 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 usually isn't complicated, but it's an extra step that you must take. No transfer of property before death 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.

Avoid 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 affairs. You can't do this with a will. However, you also can make a durable power of attorney to appoint someone to manage your finances. If you don't take any of these steps and become incapacitated, a probate court will need to appoint a conservator (often called a "property guardian") to manage your finances. Read more about this in Other Advantages of Living Trusts.

Name guardians for children. In a will, you can name guardians to care for minor children. You can't do this in a living trust. Read more about Guardianships for Your Children.

Name 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 can't use a living trust to name a person to manage your children's property, but you can use one to name a trustee to manage trust property that eventually will go to your children.

Name 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 as executor and successor trustee.

To learn more about an executor's job, see What Does an Executor Do?

Instruct how taxes and debts should be paid. 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 shouldn't do these things with a living trust.

Simple to make. Wills are simple documents that require no particular language. Wills created by attorneys might be complex and nuanced, but the law doesn't require them to be. In some states, even handwritten wills are acceptable. As with wills, there are no laws that require living trusts to be complicated. However, because living trust documents must cover the trustee's duties, they tend to be more complex (and more expensive to make) than wills. After you create the trust, you must take the additional step of transferring your property into it. See "Requires transfer of property before death," above.

Requires witnesses. To execute your will, you and two witnesses must sign it. Witnesses should be two people who won't receive anything under the will. Instead of witnesses, you must sign a living trust in front of a notary public.

What Living Trusts and Wills Can't Do

Reduce estate taxes. Neither wills nor living trusts help you reduce estate taxes, but most estates won't owe an estate tax. Learn more about whether your estate might be liable for estate taxes.

Leave money to pets. Pets can't own property, so you can't leave money to your pets with a will or trust. You can use your will or trust to leave your pets to a trusted caretaker. You also can create a pet trust to leave money to be used to care for your pet. But if you try to leave your pet property, that property will end up in your residuary estate. Learn more about caring for your pet after you die.

Leave final wishes. Although it's 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 Final Arrangements 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, don't 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.

Do I Need a Will or a Living Trust?

Most people should have 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 Might Not Need a Living Trust.

Even if you decide that you need a living trust, you probably 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.

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 intestacy laws of your state. Under intestacy laws, your property will pass to your closest relatives first (spouse, children, or parents) and then to increasingly distant relatives until the court finds a relative who can take the property. If the court doesn't find someone, your property will go to the state. Learn more about Intestate Succession.

Getting Help

Many people can make a trust or will on their own. To create a Will, Living Trust, and more, see Nolo's Quicken WillMaker & Trust. If you're uncomfortable making estate planning documents (or if you have complicated assets, children with special needs, or other complicated family dynamics), you should consider speaking with an estate planning attorney who's licensed in your state.