Wills and Trusts
What’s the Difference Between a Will and a Living Trust?
Estate planning is essential for ensuring your assets are distributed according to your wishes. Two common options are a last will and testament and a living trust, but they function differently and serve distinct purposes. Understanding their differences can help you make the right choice for your situation.
What Is a Last Will and Testament?
A last will and testament is a legal document that outlines how you want your assets distributed after your death. However, a will must go through probate—a court-supervised process that validates the document, settles debts, and distributes assets.
Key Features of a Last Will and Testament:
✅ Takes effect after death – A will has no power until you pass away.
✅ Names beneficiaries – Specifies who receives your assets.
✅ Requires probate – The court must validate and oversee asset distribution.
✅ Public record – Once probated, the details become accessible to the public.
What Is a Living Trust?
A living trust is a legal arrangement where you (the grantor) transfer assets into a trust while you’re alive. You manage the trust during your lifetime and designate a successor trustee to handle it after your passing. The primary benefit of a living trust is that it allows assets to pass directly to beneficiaries without probate.
Key Features of a Living Trust:
✅ Takes effect immediately – Unlike a will, a living trust is active as soon as it is created.
✅ Avoids probate – Assets in a trust bypass the probate process, allowing faster distribution.
✅ Manages assets during incapacity – If you become unable to manage your affairs, your successor trustee steps in.
✅ Private document – A trust remains private, unlike a will, which becomes public during probate.
✅ Can be changed or revoked – A revocable living trust can be modified as needed during your lifetime.
Key Differences Between a Last Will and a Living Trust
| Feature | Last Will & Testament | Living Trust |
|---|---|---|
| When It Takes Effect | After death | Immediately upon creation |
| Probate Required? | Yes | No |
| Covers Incapacity? | No | Yes |
| Privacy | Public record | Private |
| Time to Distribute Assets | Can take months or years | Immediate to a few weeks |
| Control During Lifetime | No | Yes |
You Don’t Have to Choose Between a Will and a Living Trust
A common misconception in estate planning is that you must decide between a last will and testament or a living trust—but with the Texas Family Trust Plan, you get both. Instead of struggling to determine which is best, this plan is designed to adapt to how you use it.
- If you sign the documents and do nothing else, your estate plan functions like a traditional will-based plan. This means less work upfront, but your estate will go through probate.
- If you transfer assets into the trust or make the trust the beneficiary of payable-on-death accounts, your estate plan will function as a trust-based plan, avoiding probate. This takes more effort upfront but makes things easier for your loved ones later.
This flexible approach ensures you don’t have to make a difficult decision now. You can start with a Texas Family Trust Plan today and decide over time how you want it to function. Either way, your estate plan is in place.
