Living trust vs will

They do different jobs, and the question is rarely one or the other. Nearly everyone with a trust also has a will. The real question is whether you need a trust in addition to one.

A will says who gets what, and takes effect at death through a court process called probate.

A living trust holds your assets during your life and passes them to the people you name without probate, but only the assets you actually put into it.

What a will does

• Names who receives your property
• Names an executor to carry it out
• Names a guardian for minor children, which a trust cannot do
• Can create a trust at death, for a child or a beneficiary who should not receive money outright

A will only controls property that passes through your estate, and it does not override a beneficiary designation. If your will leaves everything to your daughter but your retirement account still names your ex-spouse, the account goes to your ex-spouse. Beneficiary designations take precedence over the will.

A will must be signed according to your state's rules, usually with witnesses. An improperly witnessed will can fail entirely.

What a living trust does

You create the trust, then transfer assets into it. You are typically the trustee while you are alive, so day to day nothing changes. You name a successor trustee to take over when you die or become incapacitated.

Property held in the trust passes to your beneficiaries without probate.

Two benefits people underrate:

• Incapacity. If you cannot manage your affairs, the successor trustee steps in without a court guardianship proceeding.
• Privacy. A probated will becomes a public record. A trust generally does not.

What probate actually costs depends on which state you die in

Probate is often described as a catastrophe to be avoided at any cost, usually by someone selling a trust. The honest answer is that the cost depends almost entirely on your state, and the difference between states is not small.

In most states, attorneys bill hourly, or by what a court considers reasonable. Washington's statute, for example, simply allows "such compensation for his or her services as the court shall deem just and reasonable." In those states the cost tracks the work, and a simple estate is not ruinous.

In a minority of states, the fee is set by statute as a percentage of the estate. California is the clearest example. Its Probate Code sets attorney compensation for ordinary services on a fixed sliding scale:

Portion of the estate	Statutory fee
First $100,000	4%
Next $100,000	3%
Next $800,000	2%
Next $9,000,000	1%
Next $15,000,000	0.5%

The personal representative is entitled to compensation on that same schedule, so the scale can effectively be paid twice. A court may allow still more for extraordinary services.

The part that surprises people

In California the percentage is applied to the appraised value of the estate property, before debts. The statute directs that the calculation be made "without reference to encumbrances or other obligations on estate property."

A house appraised at $600,000 with a $500,000 mortgage on it is counted as $600,000, not as the $100,000 of equity the family actually inherits. On that house alone the statutory attorney fee is $15,000, and the representative may claim the same again.

That single rule is why a trust can be worth its cost in California and not worth it in a state next door. Find out which kind of state you are in before anyone sells you anything.

Time: in California, a formal probate "typically takes 9 to 18 months and can sometimes take even longer." Treat that as a California figure, not a national one.

Small estates: most states have a simplified procedure with a dollar threshold, and the thresholds are wildly different and not directly comparable.

State	Threshold	Conditions
California	$208,850 personal property	Deaths on or after 1 April 2025; $750,000 separate limit for a primary residence
Texas	$75,000	Excludes homestead and exempt property; intestate estates only; 30 days after death
Washington	$100,000	Personal property only; 40 days after death
New York	$50,000	Personal property only; no real property

These change. California's adjust every three years, with the next revision due 1 April 2028. Check your state's current figure rather than trusting any page, including this one.

A trust only works if it is funded

This is the failure that wastes the most money. People pay for a trust, sign it, put it in a drawer, and never retitle anything into it.

A trust controls only what has been transferred into it. Assets still in your own name at death generally pass under your will, through probate. The family has then paid for a document that did nothing.

Funding means retitling real estate by deed, changing bank and brokerage accounts into the trust's name, and reviewing beneficiary designations.

Retirement accounts are the exception. You generally do not retitle an IRA or a 401(k) into a trust, doing so can trigger immediate income tax. These pass by beneficiary designation, and naming a trust as beneficiary has consequences that need professional advice.

The pour-over will

Anyone with a trust should also have a pour-over will. It catches anything never transferred and directs it into the trust at death.

It is a safety net, not a plan. Property caught by a pour-over will generally goes through probate first. And a will remains the only place to name a guardian for minor children.

When a trust is worth it

Consider one if:

• You live in a state with statutory percentage fees, especially with real estate and a mortgage
• You own real estate in more than one state, which otherwise means probate in each
• You want privacy
• You want a plan for incapacity without a court proceeding
• You have a beneficiary who should not receive money outright
• You have a blended family and want control over what happens after your spouse dies

A trust may be more than you need if your estate is modest, your state prices probate by the hour, and most of what you own already passes by beneficiary designation or joint ownership.

What neither document controls

Some assets pass outside both, by their own terms:

• Retirement accounts with a named beneficiary
• Life insurance
• Payable-on-death bank accounts
• Transfer-on-death brokerage accounts and, in some states, vehicles and real estate
• Property held in joint tenancy with right of survivorship

For many families this is most of what they own. Reviewing beneficiary designations is often worth more than either document, and it is free. Check them after every marriage, divorce, birth, and death.

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The 72-Hour File records where your will or trust lives, who holds the original, and what your beneficiary designations currently say. See what is inside