Will vs. Trust: Which Do You Need? Differences and Cost

You likely need a will if you have a spouse, kids or property. Trusts can give you more control over your estate.

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Updated Oct 19, 2025

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Wills and trusts are legal instruments that ensure your assets pass to heirs according to your wishes. The main difference between wills and trusts is that wills take effect after you die, while trusts can help manage your assets while you’re still alive.

Also, trusts can help an estate avoid probate, the court process for distributing your property; wills, on the other hand, typically must go through probate

Cornell Law School Legal Information Institute. will. Accessed Oct 19, 2025.
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Generally, you may need a will if you're married, have kids or own property.
A trust can make sense if you have a large or complicated estate, or if you need more control over how assets are distributed.

» MORE: See our picks for the year's best financial advisors

🤓 Nerdy Tip

As part of the account setup process, retirement accounts and life insurance policies often require you to designate a beneficiary for the account. That designation typically overrides designations you make in a will or trust. Be sure your beneficiary designations align with your wishes.

How to decide if you need a will, a trust or both

Do I need a will?

Many people feel like they don't have enough assets to need a will. Sometimes, this is true; sometimes, it isn't. Check your state's probate threshold — the dollar value of assets that would trigger a longer probate process — to see whether making a will could make the probate process faster.

“I have children under the age of 18 (or the age of majority in your state).”

In general, you need a will in order to specify guardians for minor children in the event of your death.

“Everything I own is worth more than my state’s probate threshold.”

In some states, estates under a certain value don’t need to go through probate. Thresholds vary by state. The probate process can be longer and more complicated if you don’t have a will. You likely need a will if your estate is over the threshold in your state.

“Everything I own is worth less than my state’s probate threshold.”

You may not need a will at this time. A will is helpful to tell your loved ones where you want your personal belongings to go, but it may not be necessary for legal purposes if you don’t own real estate or any assets above the threshold that requires the involvement of the probate court in your state.

“I have a trust.”

Even if you have a trust, you may still need a will if you want to leave instructions for assets that didn’t make it into the trust. One strategy: A pour-over will works as a contingency alongside a living trust. It directs everything in your estate over to the living trust when you die. People use pour-over wills as a backstop in case some of their assets didn’t make it into the trust before they died.

For example, if you removed your home from the trust during a refinance and never retitled back into the trust, a pour-over will can transfer the home back into the trust if you happen to die when the house is still outside the trust.

» Learn more: How pour-over wills work

Do I need a trust?

“My estate is big enough to trigger estate tax. I want to minimize those taxes.”

The federal estate tax doesn't apply to most estates, but you may consider an irrevocable trust if your estate is big enough to trigger federal or state estate taxes. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026. Some state estate taxes start as low as $1 million.

» MORE: See who has to pay federal or state estate taxes

An irrevocable trust permanently removes assets from your estate and gives them to the trust. This irreversible transfer of ownership thus takes the assets out of your possession in the eyes of the IRS, leaving you with a smaller estate (and, therefore, possibly less estate tax). You may have to pay gift taxes on your transfers to the trust. Keep in mind that irrevocable trusts are permanent once they’re signed and funded, so the assets in the trust, and the beneficiaries you name, cannot be changed.

» Learn more: How to use an irrevocable trust

“I’m at risk for incapacity and want someone else to manage my assets responsibly while I’m alive.”

You may benefit from a revocable living trust. This type of trust allows you to change the beneficiaries and assets as long as you’re alive and physically and mentally able to do so. If you become unable to manage the trust, the trustee you chose can take over for you.

Revocable living trusts ensure that your assets are managed according to your wishes if you fall ill, lose mental capacity or even are out of the country for an extended time.

» Learn more: How revocable living trusts work

“I have a child with a disability or functional needs.”

You may benefit from creating a special needs trust. This kind of trust can financially support a child with a disability or functional needs without disqualifying them from needs-based government benefits such as Medicaid or Supplemental Security Income (SSI).

» Learn more: How to set up a special needs trust

“I want to protect my assets from creditors.”

You may want an irrevocable trust. Creditors are able to make claims on estates even if there is a will or living trust in place, though it is often harder to make a claim against assets in a living trust. Only an irrevocable trust can guard assets from creditor claims. The grantor of a living trust is still considered the owner of the assets.

» Learn more: Revocable vs. irrevocable trusts

“I want to control how my beneficiaries spend the money I leave for them.”

You might want to set up a spendthrift trust or an educational trust. If you’re concerned about how (or how quickly) your heir will spend their inheritance, a spendthrift trust can include specific language that restricts the timing of access to your assets and sets rules for how to spend the assets. It can also help protect assets from creditors if your beneficiary has debt.

» Learn more: How to set up a spendthrift trust

“I’m concerned that my will might be challenged in court.”

You might benefit from a trust. Assets held in trust aren’t subject to probate court like wills are. They’re also more likely to be set up with the help of an estate attorney, which can give them more legal validity.

Trusts are also effective once signed and funded, and if they’re revocable, can be updated throughout your lifetime. This means that they’re less likely to be successfully challenged than a will, because it’s harder to argue that a trust is outdated, made at a time when the grantor was not of sound mind or made under the influence of someone else.

“My children may still be minors when I die, and I want them to receive funds before they come of age.”

You may benefit from a testamentary trust. This is a trust created by the terms of your will after your death. For example, a will may stipulate that a trust be created to help care for minor children until they turn 25 years old. You can include multiple testamentary trusts in your will, including for charitable donations.

» Learn more: How a testamentary trust works

“I want to split my estate between my personal beneficiaries and a charitable organization.”

You may benefit from a charitable lead trust or a charitable remainder trust. Charitable lead trusts support a charitable organization for a set period of time, and then it passes the rest to the grantor’s beneficiaries.

Charitable remainder trusts are the opposite: they pay an income to the donor or beneficiaries for a set period of time, and then give the remainder to a charity. Some charitable trusts can qualify for tax-exempt status if they meet certain requirements.

» Learn more: How to set up a charitable lead trust or a charitable remainder trust

“I want to protect my childrens’ inheritance in case my surviving spouse remarries or has other children.”

You may want to set up a qualified terminable interest property (QTIP) trust. The assets in this type of testamentary trust support a surviving spouse with consistent income, then go to your chosen beneficiaries (usually children) when the surviving spouse dies.

» Learn more: How a QTIP trust works

» MORE: See our picks for the best wealth management firms

Will vs. trust: Overview and key differences

	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 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026.	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.

» Planning your estate? Here’s how to get started

How does a will work?

A will is a set of instructions for what to do with a person’s assets after they die.

The creator of a will, called the testator, elects an executor to handle the estate’s affairs upon their death. These affairs include implementing the will's instructions for things such as guardianship of minor children and pets, distribution of property and assets, charitable donations and funeral arrangements.
Wills typically do not apply to assets that are owned jointly — those usually transfer to the surviving co-owner when one owner dies.
State laws for wills vary, but most require that the testator and two witnesses sign the will before it becomes legally binding and effective.

How does a trust work?

Trusts are separate legal entities you can set up to ensure that your assets go to the right beneficiaries in the way you choose. They can give you more control over the distribution of your estate, and some types of trusts may even reduce your estate taxes if you have a large estate.

Trusts can also help your estate avoid the probate process, which is public record and can take several months.
Unlike wills, trusts need to be funded, which means that you must transfer your assets — property, accounts (investments, retirement, banking), etc. — to the trust by retitling them in the name of the trust.
To set up a trust, the creator (called the grantor) opens a trust account, puts assets in the name of the trust and authorizes another person, called a trustee, to distribute those assets to the trust’s beneficiaries according to the rules in the trust agreement.

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Article sources

NerdWallet writers are subject matter authorities who use primary, trustworthy sources to inform their work, including peer-reviewed studies, government websites, academic research and interviews with industry experts. All content is fact-checked for accuracy, timeliness and relevance. You can learn more about NerdWallet's high standards for journalism by reading our editorial guidelines.

1. Cornell Law School Legal Information Institute. will. Accessed Oct 19, 2025.
2. Florida Bar Association. The Revocable Trust in Florida. Accessed Oct 19, 2025.
3. American College of Trust and Estate Counsel. Creditors’ Rights vs. Trustees’ Protections. Accessed Oct 19, 2025.
4. New York City Bar Legal Referral Service. Testamentary Trusts. Accessed Oct 19, 2025.
5. American Bar Association. Introduction to Wills. Accessed Oct 19, 2025.
6. Cornall Law School Legal Information Institute. trust. Accessed Oct 19, 2025.

About the authors

Tiffany Lam-Balfour

Tiffany Lam-Balfour is a former investing writer and spokesperson at NerdWallet. Previously, she was a senior financial advisor and sales manager at Merrill Lynch. Her work has been featured in MSN, MarketWatch, Entrepreneur, Nasdaq and Yahoo Finance. Tiffany earned a finance and management degree from The Wharton School of the University of Pennsylvania.

Dalia Ramirez

Dalia Ramirez writes about home and car services for NerdWallet. She has previously written about estate planning, cryptocurrencies, small business software and other personal finance topics. Dalia has a B.A. in science and technology studies from Wesleyan University. Her work has appeared in publications including The Washington Post, the Los Angeles Times, Bloomberg and The Associated Press. She is based in San Francisco.

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