Commentary · Estate Planning

Trust vs. Will: What's the Difference, and Do You Need Both?

Written by the William Allan team · Published 2026-10-08

"Trust vs. will" is usually asked as an either-or choice. It is not. A will and a trust do different jobs, they solve different problems, and many estate plans end up using both.

Here is what each document actually does, where people get caught, why the state you live in changes the answer, and how to think about which your plan needs.

What a Will Does

A will is the foundational estate planning document. It does three main jobs:

• Names an executor: the person responsible for settling your affairs, paying final expenses, and distributing what you own.
• Directs who receives the property that passes through your estate.
• Nominates guardians for minor children. A will is the usual place to do this, though some states, including California, also accept a separate signed nomination. Guardian nominations normally go in the will, not the trust.

A will also has two important limits. It takes effect only at your death, so it says nothing about who manages your affairs if you become incapacitated. And it operates through probate: the court-supervised process of validating the will, settling debts, and transferring property. Probate is public record, it takes time, and in some states it is expensive.

What a Living Trust Does

A revocable living trust is a legal container you create during your lifetime. You typically serve as your own trustee, keep full control of the assets, and can amend or revoke the trust at any time. "Revocable" also means the trust does not reduce income or estate taxes by itself; for tax purposes, the assets are still yours. For context, the federal basic exclusion for estate and gift tax is $15 million per person in 2026, according to the IRS estate and gift tax update. For many families, the reasons to consider a trust are probate, incapacity, and control, not federal estate tax.

What the trust changes is the mechanics:

• Assets titled in the trust pass to your beneficiaries under the trust's terms, outside probate.
• If you become incapacitated, your named successor trustee steps in and manages trust assets without a court proceeding.
• The trust's terms generally stay private. Unlike a probated will, they are not usually filed in the public record, although beneficiaries and heirs are generally entitled to see them.
• A trust can distribute over time rather than all at once: at ages you choose, for purposes you choose, under a trustee's discretion.

One critical caveat: a trust only controls what it owns. An unfunded trust, one that was signed but never had accounts and property retitled into it, avoids nothing. Funding is where many trust-based plans quietly fail.

The Practical Differences

• Probate: property passing under a will goes through it; assets properly titled in a trust skip it.
• Incapacity: a will is silent; a trust with a successor trustee covers the assets it holds, alongside a durable power of attorney and a health care directive for the accounts and decisions a trust cannot reach.
• Privacy: probate files are public; trust terms generally are not, though beneficiaries and heirs can usually see them.
• Guardianship for minors: guardian nominations normally go in the will, not the trust.
• Upfront cost and upkeep: a will is simpler and cheaper to put in place; a trust costs more to draft and requires the discipline of retitling assets and keeping the funding current.
• Control over timing: both can stage distributions over time, but a will does it through a testamentary trust, which in California remains under court oversight; a living trust does it privately.

Why the State You Live In Matters

A large part of the trust-versus-will decision comes down to what probate costs where you live. Two states we serve show how different that can be.

California sets probate compensation by statute. For ordinary services, the executor and the executor's attorney may each be paid a percentage of the estate's value: 4% of the first $100,000, 3% of the next $100,000, and 2% of the next $800,000, with lower rates above that. The value used is the gross value of the property, without subtracting mortgages or other debts. Probate Code section 10810 sets the attorney's schedule and section 10800 sets the executor's.

• Hypothetical illustration, not a prediction of any estate's costs: a home appraised at $900,000 with a $400,000 mortgage, plus $100,000 in other probate assets, is a $1,000,000 estate for this calculation, assuming no sale gains or estate income. The statutory amount is $23,000 for the attorney and another $23,000 for the executor, $46,000 before court costs and any fees a court allows for extraordinary services. A family member serving as executor may choose to waive the fee.

California also offers simpler procedures for smaller estates. For deaths on or after April 1, 2025, personal property generally may be collected by a sworn declaration, without probate and at least 40 days after the death, if the gross value of the decedent's California estate does not exceed $208,850. A primary residence worth $750,000 or less may pass through a simplified court petition. Assets that pass outside probate, such as property already titled in a trust, are generally not counted toward these limits. The Judicial Council's adjusted amounts list the current figures, which are next scheduled to change on April 1, 2028.

Colorado works differently. Many estates there can be opened through informal probate, where a probate registrar reviews the paperwork and there is no court hearing. The Colorado Judicial Branch describes it as taking less time and paperwork than formal probate. A will-based plan can be a more practical fit where probate is simpler, though privacy, incapacity, and property in other states still matter.

Why Many Plans Use Both

A typical trust-based estate plan pairs the trust with a "pour-over" will. The trust holds and distributes the bulk of the property. The will nominates guardians, catches any assets that never made it into the trust, and directs them into it at death, through probate or, where eligible, a simplified procedure. The two documents are designed to work together, which is why the either-or framing misleads people.

What Neither Document Controls

Retirement accounts, life insurance, annuities, and any account with a beneficiary or transfer-on-death designation pass by contract, not by will or trust. The designation on file generally controls, even when it contradicts documents signed years later, though a spouse's rights in an employer retirement plan and some state rules after a divorce can override it.

This is one of the most common gaps in otherwise careful estate plans: a will and trust updated after a remarriage or a death in the family, sitting alongside a retirement account beneficiary form no one has looked at since the account was opened. Reviewing designations belongs on the same calendar as reviewing the documents.

If You Have Neither

Without a will or a trust, state law decides who inherits property that passes through the estate, and a court appoints someone to administer it. The result may not match what you would have chosen, and no one you picked has been nominated to raise minor children. Beneficiary designations and jointly owned property with survivorship rights still pass under their own terms.

When a Will Alone May Be Enough

• The estate is straightforward and the beneficiaries are capable adults.
• Your state offers simplified or inexpensive probate for estates of your size.
• Privacy and multi-state property are not concerns.
• The plan's main job is naming guardians and directing assets cleanly.

When a Trust Tends to Earn Its Cost

• You own real estate in more than one state; a trust can spare your family a separate ancillary probate in each.
• You own a home or other assets in a state where probate is costly, such as California, and the estate would exceed its simplified-procedure limits.
• You want a built-in plan for incapacity, not just death, alongside a durable power of attorney and a health care directive.
• Beneficiaries are minors, or you want inheritances staged over time rather than delivered in a lump sum.
• Privacy matters to you or your family.

Where the Investment Plan Fits

William Allan does not draft wills or trusts; those are legal documents, prepared by an estate attorney. Our role is helping the financial side match the documents: account titling and beneficiary designations that agree with the plan, estate planning coordinated with the portfolio and the tax picture, and coordination of trust funding as accounts change. Because our tax work is CPA-led, the estate conversation and the tax conversation can happen at the same table.

If your documents and your accounts have not been reviewed side by side recently, that review is a reasonable place to start.

Schedule a free first call with Ian. He will gather your situation and connect you with the appropriate advisor.

This commentary is for informational purposes only and is not investment, tax, or legal advice. Estate planning documents should be prepared and reviewed by a qualified attorney licensed in your state. Probate rules, fees, and thresholds vary by state and change over time. All investing involves risk, including the possible loss of principal, and past performance does not guarantee future results.