Wills vs. Trusts: Key Differences Explained in Plain English

As an estate planning attorney, I know how easy it is to assume certain legal concepts are “common knowledge.” But for most people, they’re anything but. Think about the last time you sat in a doctor’s office and heard a string of medical terms that made no sense. Frustrating, right? Legal jargon can feel the same way.

That’s why I’m writing this post: to break down the differences between a will and a trust in plain English. These terms may seem interchangeable, but they serve different purposes in estate planning. My goal is to make the distinctions clear so you feel informed and empowered when making estate planning decisions.

Important note: This article is for general information only and is not legal advice. To determine what estate planning documents are right for your situation, consult with an estate planning attorney.

What Is a Will?

A will is a legal document that explains how your assets should be distributed after your death. It can also name a guardian for minor children and provide instructions for how your estate should be managed.

The person who creates a will is called the testator (sometimes referred to as the decedent after death). Courts often use the phrase “testamentary intent” to describe the wishes expressed in a will.

A will can include additional details such as:

• Whether the executor must obtain a bond

• How inheritance taxes should be paid

• What happens if a beneficiary is a minor at the time of distribution

  
  

When Does a Will Take Effect?

A will has no effect during your lifetime. You can revoke or amend it at any time before your death. It becomes legally effective only once it is admitted to court through the probate process.

The will also appoints an executor, who is responsible for:

• Identifying estate property

• Paying debts, creditors, and taxes from estate assets

• Distributing property to the beneficiaries named in the will

  
  

Probate vs. Non‑Probate Assets

A will applies only to probate assets which are property that must go through the probate court before ownership transfers. Common probate assets include:

• Real estate

• Bank accounts

• Personal property such as jewelry or collectibles

  
  

Non‑probate assets bypass the probate process because ownership transfers automatically by law. Examples include:

• Retirement accounts with a named beneficiary

• Life insurance policies with a named beneficiary

• Assets held in a trust

  
  

If a beneficiary is properly named, the financial institution can release funds directly without a court order. Importantly, beneficiary designations override the terms of a will.

For example, imagine a father names his son as the beneficiary of his life insurance policy. Later, he becomes estranged from his son and writes a will leaving his entire estate to his daughter, but he forgets to update the life insurance designation. At his death, the life insurance proceeds will still go to the son, because the policy is a non‑probate asset and not governed by the will.

What Is a Trust?

At its core, a trust is a legal arrangement that involves three roles:

• Settlor (also called trustor or grantor): Creates the trust and transfers assets into it

• Trustee: Manages the assets according to the trust’s rules

• Beneficiary: Receives the benefits of the trust

  
  

Sometimes, the settlor can also be a beneficiary. The rules for how the trustee manages the assets are spelled out in a legal document called the trust instrument, and the assets held in trust are called the trust property or trust corpus.

Types of Trusts

Trusts are versatile estate planning tools, and there are many different kinds. Broadly, they fall into two categories:

• Revocable trusts (revocable living trusts):

  
  

  • Can be changed or revoked by the settlor during his or her lifetime

  • The settlor retains control, so creditors and taxes still apply

  • Useful for avoiding probate but not for asset protection

    
    

• Irrevocable trusts:

  
  

  • Cannot be changed or revoked once created

  • The settlor gives up ownership and control of the assets

  • If structured correctly, can protect against creditors and reduce estate or inheritance taxes

    
    

A trust can also be created through a will, in which case it is called a testamentary trust. This type only takes effect after death and probate of the will.

Funding the Trust

A trust becomes effective only once it is funded, meaning assets are actually transferred to it. This is a step many people overlook. Signing the trust document alone does nothing if property isn’t retitled in the name of the trustee.

Example: If you create a revocable living trust to avoid probate but forget to transfer your home into the trust by executing a new deed, the home will remain in your name. At your death, the property would still need to go through probate, and it may not pass to the beneficiaries named in the trust unless those same beneficiaries are also named in your will. Without a will, the property could be distributed under intestate succession laws, which may not reflect your wishes.

This is why attorneys often recommend having will even if you have a trust to ensure all property is covered.

How Long Does a Trust Last?

A trust lasts as long as the trust document specifies. Some trusts end at the settlor’s death, while others continue for years.

For example:

• Parents may want their children’s inheritance held in trust until the children reach a certain age.

• A trustee or beneficiaries can petition the court to terminate a trust if continuing it no longer makes sense (such as when the assets are too small to justify ongoing administration).

  
  

Court Oversight

Unlike a will, most trusts do not need to be filed in court and are administered privately.

Exceptions include:

• Testamentary trusts created through a will (since the will itself goes through probate)

• Trusts established for the benefit of a minor or a person with a disability, which may require court supervision

  
  

What Are the Key Differences Between a Will and a Trust?

As discussed above, there are several important differences between a will and a trust. Here’s a side‑by‑side comparison:

	Will	Trust
Definition	Legal document that becomes effective at death	Legal arrangement between a settlor, trustee, and beneficiary
Property Covered	Probate property	Assets transferred to the trust
Becomes effective	When the testator dies and the will is admitted to probate	When the trust is funded with property
Ends when	Probate estate closes	When the trust document specifies (can be settlor’s death or may continue for many years)
Can be changed or revoked	Anytime prior to the testator’s death	Revocable trusts: anytime prior to settlor’s death Irrevocable: cannot be changed without a court order
Created by	Testator	Settlor
Court Involvement	Must be filed in probate court; court oversees administration	Generally no court oversight unless special circumstances are present (e.g., testamentary trusts, trusts for minors or disabled beneficiaries)
Privacy	Public record once filed in court	Usually private if not filed with the court
Appropriate for	Everyone should have a will	Useful depending on needs, goals, and size of the estate
Purposes	-Direct how assets should be distributed -Appoint guardian for minor children -Provide instructions on probate process -Can create a testamentary trust	-Avoid probate if properly funded -Manage assets during lifetime and after death -Distribute assets prior to or upon termination -Provide ongoing support for beneficiaries/minors -Potential tax or creditor protection

Key Takeaways

• Both wills and trusts are estate planning tools designed to transfer property to beneficiaries.

• A will is essential for nearly everyone, especially to name guardians for minor children and direct probate assets.

• A trust can be a powerful tool, but it isn’t necessary for every estate. It’s most helpful for those who want to avoid probate, protect assets against creditors or estate and/or inheritance taxes, or provide ongoing management of assets.

  
  

If you’re considering whether a trust may be appropriate for your situation, check out my other blog post specifically on trusts: “Do I Need a Trust?”

For personalized guidance on what documents should be part of your estate plan, call to schedule a consultation.