Living trust vs. will: What’s the difference?

The difference between a will and a living trust

A will takes effect only after death and generally must go through probate, which is typically a matter of public record. A living trust can take effect during your lifetime, help avoid probate, and allow a successor trustee to manage trust assets if you become incapacitated.

How a will works

A will is a relatively simple estate planning document that will speak for you at the time of your death. When properly crafted, a will should clearly explain what you want done with your personal property (home, car, jewelry, artwork, etc.), as well as your financial assets (your savings, investments, retirement accounts, and such). If you have young children or other living dependents at home, your will should also appoint a guardian who will take care of their needs until they reach adulthood. In most cases, the assets mentioned in a will are required to go through the probate process, which is a legal proceeding designed to make sure there are no property liens, overdue taxes, or other outstanding debts that must be paid before the assets can legally change hands.

What happens if you don’t have a will?

If you pass away without a will, the state where you live will decide what happens to your assets and dependents. In most states, the surviving spouse or the closest living relative will inherit everything, but not always. That’s why it’s so important to have a will and to make sure you update it whenever your family or your financial circumstances change.

How a living trust works

As the name suggests, a living trust is a legal arrangement that goes into effect while you are still alive. In this case, you are transferring assets into an account that will be managed by a third party, who is known as a trustee. The trustee will invest and administer the account according to your instructions and then oversee the distribution of your assets after your death. What makes a trust different from a will, however, is that the trust can continue to operate even after you’re gone. This distinction can be especially helpful for parents of a child with special needs or wealthy parents who want their children to receive their inheritance gradually or perhaps at a specific age (say, their 30th birthday).

Are there any other reasons to use a living trust?

Living trusts are also important because they help you avoid what can sometimes be a long and costly probate process. Since the assets in a trust do not have to go through probate, it can be a much quicker and easier way to transfer wealth to your heirs. Also, some trusts (known as irrevocable trusts) can help reduce your tax burden because they take taxable assets out of your name and transfer them into the trust.

Trusts and estate planning

A trust, while not required for every estate plan, can be an important part of estate planning, helping to protect assets, address tax considerations, and provide for your family after you’re gone. If you're thinking about setting up a trust, consider purchasing a life insurance policy to ensure your assets go to your loved ones. Life insurance benefits are typically distributed tax-free, and your beneficiary can use the proceeds to pay estate taxes or other debts your estate may owe.

How to start a will

To create a will, list your assets, choose an executor, name your beneficiaries and guardians, and use an online platform, software template, or estate attorney to prepare it.

The National Council on Aging researched six online will makers in 2026.* Some of the sites provide a quick and straightforward process, while others are better suited for complex trusts and estates.

* “The Best Online Will Makers of 2026: Tested and Reviewed,” The National Council on Aging. July 23, 2026. https://www.ncoa.org/product-resources/estate-planning/best-online-will-makers/

How to start a trust

You first need to choose which type of trust is the best option.

• Revocable living trust: This allows you to keep control of your assets and change, modify, or cancel the trust at any time while you’re alive.
• Irrevocable trust: Once created, it generally cannot be changed or canceled without the consent of the beneficiaries or under limited legal circumstances. In exchange for giving up some control, it can provide stronger asset protection and potential tax benefits.

Next, make a list of your assets, such as your home, bank accounts, investments, and land/property. Then choose the people—grantor (the person making the trust, which is you), trustee (the manager of the trust; this can also be you while you’re alive), successor trustee (the person who assumes control if you get sick or die), beneficiaries (the people or charities who receive your property).

Finally, draft the document, get it signed and notarized, and begin funding the trust.

If you would like help creating a trust, talk to an agent. They will help you carefully consider all of your options and align your goals, so your wishes are clear. 

In conclusion:

Whether you choose a will or a living trust, it’s important to make sure that you do not leave the division of your assets up to your state. Once you have either a will or a living trust in place, you can rest assured that your final wishes will be carried out and that you helped make this difficult time a little easier for your loved ones.

Frequently asked questions

Neither New York Life Insurance Company nor its agents provide tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.

Source Material:

https://www.freewill.com/learn/benefits-of-a-living-trust

https://www.freewill.com/learn/revocable-trust-vs-irrevocable-trust