Living Trust vs. Will: What’s the Difference?

Most people should have a will, but a living trust can help keep your assets from going through probate.
Dalia Ramirez
By Dalia Ramirez 
Updated
Edited by Tina Orem

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The main difference between a last will and testament and a living trust is when they take effect and whether they go through the probate process. A last will and testament takes effect upon death and must go through probate; a living trust takes effect when a person is alive and does not go through probate.

  • A last will and testament is an important estate planning document that most people will need to designate where their assets will go upon their death. However, wills are typically subject to a public, court-supervised probate process to distribute the person’s assets.

  • Living trusts, also called inter vivos trusts, are effective during your lifetime and won’t go through probate. They can protect your assets if you become incapacitated, and in some cases, they can help you avoid certain estate taxes. However, they can’t designate guardianship for minor children like a will can. 

  • Though living trusts can be revocable or irrevocable, the term “living trust” usually refers to a revocable living trust. 

  • Living trusts and wills have key differences, but they can be used together to take advantage of both documents' benefits.

Deciding factors

Will

Trust

Cost

Around $0 to $1,000, depending on the complexity and size of the estate and how it is created (DIY, online, via an attorney).

$160 to $600 for a simple online trust; around $3,000 and up for complex trusts.

Especially good for

People with minor children or dependents, and those who have specific wishes for end-of-life care.

Those who want their beneficiaries to receive assets while they’re still alive, potentially reduce estate taxes or avoid probate after their death.

Process

Straightforward process.

More complex process, with more paperwork.

Effect

  • Effective after one's death.

  • Usually comes secondary to trusts.

  • Provides guardianship for minor children.

  • Effective once signed and funded.

  • Generally takes precedence over wills.

  • Does not provide guardianship.

Taxes

Wills do not avoid estate taxes. The federal estate tax ranges from rates of 18% to 40% and generally only applies to assets over $12.92 million in 2023 or $13.61 million in 2024.

Irrevocable trusts can provide tax benefits and protect your estate from creditors. Revocable trusts generally do not provide these things.

Privacy

Wills may be subject to probate, which is a public legal process. People may contest your will.

Trusts bypass probate and are less likely to be successfully challenged, which gives your finances and beneficiaries privacy.

Protection during incapacity

Wills take effect after your death, so they do not protect your assets if you become incapacitated.

Trusts can protect your assets if you are incapacitated while still alive.

Trust & Will - Will

GoodTrust

Nolo’s Quicken WillMaker - WillMaker

Price (one-time)

Will: one-time fee of $199 per individual or $299 for couples. Trust: one-time fee of $499 per individual or $599 for couples.

Price (one-time)

$149 for estate plan bundle. Promotion: NerdWallet users can save up to $10.

Price (one-time)

None

Price (annual)

$19 annual membership fee.

Price (annual)

$39

Price (annual)

$99 to $209 per year.

Access to attorney support

Yes

Access to attorney support

No

Access to attorney support

No

How does a living trust work?

A revocable living trust, often just called a “living trust,” allows you to put your assets in the name of a trust, which is a separate legal entity. You’ll choose a trustee to manage the assets for you and your beneficiaries if you die or become incapacitated.

Advantages of a living trust

  • Effective once signed and funded. Living trusts take effect as soon as assets are retitled in the name of the trust. Wills only take effect after your death.

  • Protects in case of incapacity. Unlike a will, a living trust takes effect whenever the owner becomes unable to handle their own affairs due to illness or injury.

  • Avoids probate. Probate is the court-supervised legal process needed to validate your will. In some states, probate can be costly and time-consuming. Probate does not apply to assets in a trust. This also preserves your privacy, because probate proceedings are part of the public record.

  • Less likely to be contested. Living trusts generally take legal precedence over wills, and because they bypass probate, they’re less likely to be contested in court.

Disadvantages of a living trust

  • More complex and costly process. You can probably write your own will more easily — and at a lower cost — than you can create any type of trust. You’re also more likely to need an estate planning attorney to set up a trust, which can be expensive depending on the complexity of your assets. Transferring assets into the trust can also be time-consuming and complicated.

  • Cannot designate guardianship for minor children. You can use a will to name guardians for your children, but trusts typically only concern financial assets.

  • Does not provide tax benefits. Revocable living trusts can be changed or canceled by the owner at any time, so the assets in the trust are still considered the owner’s property. Because of this, revocable living trusts are still part of the owner’s estate and thus may be subject to estate tax when the owner dies. (Irrevocable trusts remove the assets from the owner’s estate, thus providing potential estate tax savings.) This also means that a revocable trust does not protect you against current or future creditors in the event of your death.

» What kind of trust works for you? Compare revocable vs. irrevocable trusts

How does a will work?

A will outlines where your assets should go when you die. You can use a will to designate who should inherit your property, name guardians for your children and make requests for funeral arrangements and other final wishes. Like a living trust, you can change your will at any time while you’re still alive.

Wills generally don’t include assets with named beneficiaries, such as 401(k) accounts or life insurance policies, or any assets that are held jointly. You’ll name an executor to carry out the instructions in your will after your death, though the document must first go through the probate process before assets can be distributed.

If you die without a will, which is called “dying intestate,” your property will be distributed according to your state's laws.

Advantages of a will

  • Simpler to create. You can write your will yourself, with an online will maker or with the help of an estate planning attorney for what will probably be a lower cost than a living trust. There’s no extra step of transferring assets; you just need to list the property you own and where it should go.

  • Can designate guardianship for minor children. You can use a will to name a guardian to care for minor children in the event of your death.

Disadvantages of a will

  • Does not protect in case of incapacity. Because wills only have legal standing after death, they can’t protect your assets if you become unable to handle your own affairs (as a living trust can).

  • Usually must go through probate. Wills typically need to be validated in probate court before the estate’s assets can be distributed. Probate can be a long, costly process in some states, and proceedings are part of the public record. People can contest wills if they believe they have a claim to certain assets in the estate.

  • Does not provide tax benefits. Like revocable living trusts, wills don’t reduce estate taxes or protect assets from creditors. The federal estate tax ranges from rates of 18% to 40% and generally only applies to assets over $12.92 million in 2023 or $13.61 million in 2024. However, estates as small as $1 million may be subject to state-level estate taxes. 

How to integrate a living trust and a will

Trusts can be a great financial estate planning tool, but they deal with specific assets, not everything you own. It’s likely you’ll still need a will if you set up a trust, especially if you have minor children.

In most cases, a pour-over will is the best way to integrate both a living trust and a will into your estate plan. A pour-over will is a type of will with a provision to “pour” any leftover or unallocated assets in a person’s estate into a living trust when the person dies. When you create a living trust with online software or with an estate planning attorney, you’ll likely be offered a pour-over will as a counterpart.

Compare online will makers

Company
NerdWallet
rating
Price
(one-time)
Price
(annual)
Access to
attorney support
Learn more
Ease of use
Trust & Will - Will
Trust & Will - Will
Get started

on Trust & Will's website

Will: one-time fee of $199 per individual or $299 for couples. Trust: one-time fee of $499 per individual or $599 for couples. $19 annual membership fee.Yes
Get started

on Trust & Will's website

Digital Assets
GoodTrust
GoodTrust
Get started

on GoodTrust's website

$149 for estate plan bundle. Promotion: NerdWallet users can save up to $10.$39No
Get started

on GoodTrust's website

Comprehensive services
Nolo’s Quicken WillMaker - WillMaker
Nolo’s Quicken WillMaker - WillMaker
Get started

on Nolo's website

None$99 to $209 per year.No
Get started

on Nolo's website

State-specific legal advice
LegalZoom - Last Will
LegalZoom - Last Will
Get started

on LegalZoom's website

Will: $199 for Basic, $299 for Premium with attorney assist. Trust: $499 for Basic, $599 for Premium with attorney assist.$199 per year for attorney assistance after the first year.Yes
Get started

on LegalZoom's website

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