The Quick Answer: What's the difference between a will and a trust?
A will is a legal document that explains who should receive your assets after you pass away. A living trust is a legal plan that holds assets and can manage or distribute them during your life and after your death.
The biggest practical difference is probate. Assets distributed through a will generally go through probate, while assets properly transferred into a living trust generally avoid it.
Estate planning isn't something most people look forward to. But putting a plan in place now can make things much easier for your loved ones later.
Wills and living trusts are two of the most common estate planning tools. They are often mentioned together, but they do different jobs. Understanding the difference between a will and a trust can help you decide what may fit your situation.
Will vs. Living Trust: A Quick Comparison
| Will | Living Trust | |
| When it takes effect | After you pass away | As soon as it is created and funded |
| Usually goes through probate |
Generally yes |
Generally no |
| Public or private | Generally becomes public record | Generally stays private |
| Names guardians for minor children | Yes | No |
| Can manage assets if you become unable to | No | Yes |
| Cost and effort to set up | Generally lower | Generally higher |
| Ongoing upkeep | Minimal | Must be updated as assets change |
Both have advantages, and each comes with tradeoffs. A will is generally simpler and less expensive to create, while a living trust offers additional flexibility, privacy, and may help properly transferred assets avoid probate. Many people ultimately decide to use both.
What Does a Will Cover?
A will, sometimes called a last will and testament, puts your wishes in writing so your loved ones and the court know how you want certain matters handled.
A will can:
A will only takes effect after you pass away. Until then, you can generally update it as your life changes.
A will usually goes through probate. It helps guide the process, but it does not typically avoid it.
A will may also not control every asset you own. Accounts with named beneficiaries, jointly owned property, and payable-on-death accounts may pass directly to the person listed on the account.
What Is a Living Trust?
A living trust is a legal arrangement you create while you are alive. You transfer assets into the trust, and a trustee manages them according to your instructions for the people or organizations you choose, known as beneficiaries.
With a revocable living trust, you can usually act as your own trustee while you are able. You can also name a successor trustee to step in if you become unable to manage the assets or after you pass away.
How Does a Living Trust Work?
Creating the trust document is only the first step. You must also fund the trust by transferring assets, such as a home or financial account, into the trust's name.
This step matters because a living trust generally controls only the assets placed into it.
That extra work is part of why a trust takes more time and effort to set up than a will.
A living trust can:
Will vs. Trust for Avoiding Probate
If there's one difference to remember, it's probate.
Probate is the court-supervised process of validating a will, paying debts, and distributing an estate.
Probate is the legal process of settling a person's estate after they pass away. While every estate is different and state laws are different, probate can take months or even longer to complete. It may also involve court filing fees, attorney fees, executor fees, appraisal costs, and other expenses that can reduce the value of the estate before assets are distributed to heirs.
Because assets held in a properly funded living trust generally avoid probate, beneficiaries may receive those assets sooner and with fewer court-related costs.
A trust is not the only way assets can avoid probate. Beneficiary designations, payable-on-death accounts, and certain forms of joint ownership may also allow property to pass directly to another person.
Do You Need a Will or Trust?
There is no single right answer. The best fit depends on your finances, family, and goals.
For many people, the answer isn't choosing one over the other. It's deciding which combination best fits their needs.
A will may be enough if you:
A trust may be worth considering if you:
There is no specific age or income level at which everyone needs a trust. The decision depends more on what you own and what you want your estate plan to accomplish.
Do You Need Both a Will and a Trust?
Many people use both.
A trust controls the assets placed into it, while a will can cover certain property left outside the trust and name guardians for minor children.
Even people with a living trust often keep a simple will as a backup. The two documents are designed to work together rather than compete.
Is a Trust More Expensive Than a Will?
A will is usually simpler and less expensive to create. A trust generally costs more upfront and requires more effort because assets must be transferred into it and kept current.
Costs vary depending on your state, the complexity of your finances, and whether you use an online will and trust service or work with an estate planning attorney.
Online tools may work well for simpler situations. Excite Members can explore Trust & Will estate planning options designed to make creating a will or trust more convenient.
How Do I Decide Between a Will and a Trust?
Start by asking yourself:
Your answers can help point you in the right direction. If you would like to understand the basics first, the California Attorney General offers a helpful overview of wills, trusts, and estate planning. Because estate planning documents must follow the laws of your state, it is smart to speak with a qualified estate planning attorney before deciding.
You should also review your plan after major life changes, such as getting married or divorced, having a child, buying a home, moving to another state, or experiencing a major change in your finances.
Ready to Take the Next Step?
While your will or trust should be created with guidance from a qualified legal professional, Excite Credit Union can help make the process easier to begin.
Through Excite’s estate planning resources, Members can access Trust & Will’s online tools to create a will or trust from home. Explore Excite’s Trust & Will estate planning options to learn more and get started.
As you review your plan, consider these simple steps:
Excite Members can also access free financial counseling through our nonprofit partner, Balance, for help organizing their broader financial picture.
Whether you are a Member in San Jose, California, or Wilmington, North Carolina, the Excite Credit Union Team is here to help you keep the financial pieces of your plan organized and up to date.
Frequently Asked Questions
What's the difference between a will and a trust?
A will is a legal document that explains who should receive your assets after you pass away. A living trust is a legal arrangement that holds assets and can manage or distribute them during your life and after your death. Assets distributed through a will generally go through probate, while assets properly transferred into a living trust generally avoid it.
What is a living trust?
A living trust is a legal arrangement created during your lifetime to hold and manage assets for the beneficiaries you choose.
Is a trust better than a will?
Neither is automatically better. A will is generally simpler and less expensive, while a trust offers more privacy, flexibility, and probate-avoidance benefits.
Does a trust avoid probate?
Assets properly transferred into a living trust generally avoid probate. Assets left outside the trust may still go through probate unless they pass another way.
How much does probate cost?
Probate costs vary depending on state law, the size of the estate, and its complexity. Expenses may include court filing fees, attorney fees, executor compensation, appraisal costs, and other administrative costs. Because of these potential expenses and delays, some people choose estate planning strategies that help certain assets avoid probate.
Do I need both a will and a trust?
Many people use both. A trust can manage the assets placed into it, while a will can cover certain remaining property and name guardians for minor children.
Note: This article is for general educational purposes and is not legal, financial, or tax advice. Estate planning and probate laws vary by state. Consult a qualified estate planning attorney or tax professional about your specific situation.