Wills & Trusts

Trust vs. Will: Anyone Else Wondering What the Difference is?

Trusts and wills are two of the main tools in the estate planning kit. First, let’s demystify the differences.
November 29, 2023

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Fundamentally, they do similar things: they ensure your assets are passed on to the right people in the right way.

But, like all estate planning products, trusts and wills are intricate and nuanced. There are lots of differences between them. Both have pros and cons, and the right one for you will depend on your specific needs.

In many cases, it’s good to have both. Here’s what you need to know.

(If you're a financial advisor looking into the benefits of trusts and wills for your clients, read our guide to the best estate planning documents for your clients.)

Trusts vs. wills: an overview of the differences

In a nutshell:


A trust is essentially a legal tool for moving a specific asset (or assets) from you (the “grantor”) to someone else (the “trustee”), who is in charge of managing that asset for a “beneficiary” — who are the people who ultimately benefit from your asset.
The trust will describe how the trustee should manage the trust, and how it eventually gets passed along to the beneficiary. 

Unlike wills, trusts can come into effect before you die. As soon as you move the asset into the trust, the trust can be active. 


A will (your “last will and testament,” to give it the proper name) gives instructions on what you want to happen to your assets after you die. You can make a will to leave your estate to particular people.

A will appoints an executor to administer the assets in your estate, ultimately distributing your assets to beneficiaries identified by you, according to the terms of your will.

A will doesn’t come into effect until you die (except with living wills — but they’re a bit different). 

Types of trusts and wills

When comparing trusts and wills, it’s important to remember that there are many different kinds, each of which has its own pros, cons, and nuances. The main ones to remember are:


  • Revocable trusts (also known as living trusts): Can be changed by the grantor (the person who set up the trust). The trust transfers to the beneficiaries when the grantor dies.
  • Irrevocable trusts: The trust usually can’t be changed by the grantor, and the trust comes into effect as soon as the assets are moved into the trust. Irrevocable trusts usually aren’t subject to estate taxes or probate.
  • Testamentary trusts: This trust is created when the grantor dies, through the term’s of the grantor’s will


  • Simple wills: The standard “last will and testament” — the formal name for a will.
  • Joint wills: A will signed by multiple people that acts as each of their wills — typically a spouse.

Costs and fees compared

Typically, it’s more affordable to make a will than to set up a trust, especially if your estate is relatively straightforward.

If you don’t have a lot of assets to pass on, you can draw up a will quite quickly online. Because they’re simpler to draw up, costs are generally lower.

Trusts, on the other hand, are typically more complex.

Depending on the intricacy of your estate, you can also make one online or pay larger fees to an attorney.

Trusts often come with a management fee too, which is typically a fixed percentage of the value of the trust assets and other trustee fees. But if you appoint a friend or family member as your trustee, you probably won’t have to pay a management fee.

Because they can’t be changed, irrevocable trusts can be particularly complex and costly, with grantors often paying thousands of dollars in attorney fees.

Trusts vs. wills: How to avoid probate

One of the main benefits of putting your assets in a trust is that you can avoid those assets going through probate, which is the legal process of making sure the will — assuming there is one — is valid.

If you don’t have a will, this is called “dying intestate”, and your assets will be distributed based on the rules in your state.

But when you put your assets into a trust, you’re not the owner of the asset anymore — the trust is. That means it’s not considered part of your estate when you die, so probate is not needed.

Which takes precedence?

Because assets put into a trust aren’t considered part of your estate, your will doesn’t dictate what happens to that asset — the trust does.

For example, if your will leaves your entire estate to your spouse, but you put a particular investment account in a trust fund with your child as a beneficiary, the investment account is not part of your probate estate. It would pass to your child according to the terms of the trust.

Paying estate tax

Wills and trusts also differ in terms of how they’re taxed.

If you put an asset in an irrevocable trust — one that can’t be changed without the beneficiaries and courts agreeing to it — that asset isn’t considered part of your estate anymore. Instead, it belongs to the trust.

That means you don’t pay estate taxes on the assets in an irrevocable trust.

A revocable trust, or “living” trust — one that can be changed anytime by the grantor (the person who set it up) — does count as part of your estate, so you will have to pay estate taxes on any assets in a revocable trust.

Assets left behind in your will are subject to estate taxes.

Protection from creditors

As with estate taxes, putting an asset in an irrevocable trust protects that asset from creditors. That means if you owe money to anyone when you die, they can’t come after the irrevocable trust.

Revocable trusts, however, aren’t protected from creditors. Suppose you owe someone money when you die. In that case, they can make a claim against the asset(s) in the trust, and the court can tell your beneficiaries to liquidate those assets to pay off your debts.

Assets left behind in a will aren’t protected from creditors. 

Making changes

Wills are easy to change. To change a will, you can set up a codicil.

Codicils are documents that make amendments or additions to your will.

But if you have lots of substantial changes to make, the easiest thing to do is simply to make a new will.

Updating a joint will, however, can be a little different. You can only change a joint will when everyone who signed it is alive. Once someone dies, it’s fixed.

Updating a trust depends on the type of trust.

Revocable trusts — or living trusts — can be easier to update. But they usually call for a legal document with similar formalities to a will if you want to make amendments.

Legal guardianship

One of the big advantages of having a will is that you can appoint a legal guardian for your children.

Advanced directives and power of attorney: Understanding living wills

Throughout this article, we’ve mentioned that one of the big differences between trusts and wills is that trusts can come into effect while you’re still alive, and wills can’t.

When you might want a trust, rather than a will

Wills let you leave broad instructions for the distribution of your estate, appoint legal guardians and specify instructions for your funeral and later-life medical care.

They’re also relatively simple — and usually cheaper — to set up (especially with Snug 👋).

But sometimes you might also need a trust, especially if you:

  • Have a complex estate, with lots of assets
  • Want to avoid probate
  • Are trying to protect assets from creditors
  • Want to keep your assets private
  • Want to plan your estate taxes

Trusts are also useful if you want to pass on an asset to a beneficiary, but not until a future date or milestone arrives. For example, many parents will set up a trust for their child’s college fund. 

Rather than simply distributing the asset outright when the parent dies, the trust can hold the money until the beneficiary (the child, in this case) goes to college.

Although revocable trusts can be changed easily, they don’t protect your assets from estate taxes and creditors. To do that, you need an irrevocable trust.

But it’s often a good idea to have both a will and trust.

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