Key Takeaways 

• A will is simpler and cheaper than a trust, and goes into effect after you die. 
• A living trust works while you’re alive and avoids probate, but is complex and costly. 
• Only a will names guardians for your kids. 
• Most people only need a will—unless you have a larger estate. 
• Some people use both to avoid probate and make sure their kids and assets are covered. 

Living Trust vs. Will: Main Differences 

What Is a Will? 

A will is a legal document that explains what you want to happen with your stuff and who should take care of your kids after you die. 

What Is a Trust? 

A trust is a legal arrangement where you transfer ownership of your assets to a trustee who manages them on your behalf or for your beneficiaries.  

There are two main categories: 

Living Trust 

• Goes into effect while you’re alive (hence the name) 
• Transfers your assets to loved ones quickly and easily (no probate!) 
• Other people can’t access the assets in the trust until after you die 

Testamentary Trust 

• Created during the will process 
• Activated when you die 
• Makes sure property you leave behind for your kids is handed over to them at the right age 

Types of Trusts 

Revocable and Irrevocable Trusts 

A revocable trust (the most common) just means you can change the terms of the trust. How about irrevocable trusts? Yep, you guessed it—you can’t change the terms. 

Living trusts can be revocable or irrevocable, but testamentary trusts are always irrevocable because they’re activated after you die. 

With an irrevocable trust, the trust owns your stuff. So, the advantage is that your estate isn’t subject to estate taxes (unless your estate is worth more than $13.99 million)¹.

Who controls the stuff in a trust? A trustee that you select. So, if you want to make any changes, you have to convince the trustee to do it—and they can say no.

Charitable Trust 

A charitable trust is used to give away part of your estate to a charity.  

There are two types: 

• Charitable Lead Trust (CLT): You designate that assets to go to your favorite charity.
• Charitable Remainder Trust (CRT): You put certain assets into the trust that you or your beneficiaries will get income from, and whatever’s left of your assets goes to one or more charities.

Spendthrift Trust 

Have any family members who don’t know how to handle money? This kind of trust allows you to control when and how your beneficiaries get your stuff. 

Special Needs Trust 

This trust makes sure any dependents with special needs are supported and cared for after you’re gone. 

Domestic Asset Protection Trust (DAPT) 

A common way these trusts are used is to protect assets for your kids in case of a divorce. If you put assets in a DAPT, your spouse is no longer entitled to them. 

What’s Covered in a Will vs. a Trust? 

For starters, you can name a legal guardian in your will, but you can’t in a trust. So even if you have a trust, you still need a will to make sure your kids are taken care of after you die. 

Also, a trust helps you skip probate court, saving your family wasted money and time dealing with a court case while grieving. Not fun. 

How Much Does It Cost to Set Up a Living Trust vs. a Will? 

In general, trusts are more expensive than wills. But a trust might save you more in the long run by avoiding probate court. 

Here’s an overall idea of pricing: 

• Simple Will: $100–300
• Will Drawn Up by an Attorney: $300–1,000 or more
• Living Trust: $1,000–2,000

Living Trust vs. Will: Which Is Best? 

Here’s the final big question: Should you get a trust, a will, or (drumroll, please) . . . both? It really boils down to personal choice. 

• Just a will: This is the best option for most people. And with our RamseyTrusted^® provider, Mama Bear Legal Forms, it only takes 20 minutes or less. 
• Just a trust: This might be better if you have a complex estate and you’re older, have grown kids, or your estate is worth at least $1 million. It’s also a good option if you have special needs dependent or a complicated family situation. 
• Both a will and a living trust: You might need both if you have a large estate and dependents. 

Let’s wrap it up: If you’re in the 95% of people who don’t need a living trust, just get yourself a will! Don’t put off protecting your legacy.