What’s the Difference Between a Will and a Trust?

When I begin discussing estate planning in a group, one question that inevitably arises is whether a Will is sufficient. Unless you’ve delved into this topic extensively or work with it regularly, the answer may not be immediately clear.

A Will grants you control over certain default probate rules. For instance, it enables you to designate your personal representative or executor, determine whether a bond is necessary for serving in that role, specify guardianship for your minor children, and outline the distribution of your estate.

In contrast, a Trust is a collaborative agreement aimed at managing, preserving, and disbursing your assets. While not exclusively tied to death, a Trust is often misconstrued as a similar document due to its effectiveness in bypassing probate. Both instruments share the purpose of property distribution upon death, yet a Will operates within probate, whereas a Trust operates outside of it.

Without grasping this fundamental distinction between the two legal tools, it’s common to assume that having a Will alone suffices for estate planning, providing adequate coverage for your family in the event of death or unexpected circumstances.

But what is probate?

Probate is a court process in state court where creditors can make claims against your estate if they’re owed money, and if there’s anything leftover, it’s given to either your heirs or beneficiaries. Not everyone has to go through a full probate. In California as of 2024, if your gross taxable estate size is $184,500 or less, then you can use a Small Estate Affidavit to have the property transferred to you. But, you cannot use this method to transfer real property. The general rule is that if you die with assets in your personal name, then probate will be required to have those assets transferred.

Now that you have a better idea as to what probate is, why is it not a place you want to be, and what makes it so bad? First, the process is expensive. Lawyers are often hired to represent the personal representative, and both the personal representative and their attorney are required to be paid from it in the amount based on the gross estate size. The more money that is left behind, the larger the cut the fees will be. The scale is reproduced below for the personal representative and their attorney:

  • 4% on the first $100,000
  • 3% on the next $100,000
  • 2% on the next $800,000
  • 1% on the next $9,000,000
  • 0.5% on the next $15,000,000

Based on an estate size of $200,000, here is the breakdown of what the personal representative and their attorney would be paid individually:

Attorney’s Fee: 4% of the first $100,000: $4,000 3% of the next $100,000 ($200,000 - $100,000 = $100,000): $3,000 Total Attorney’s Fee: $4,000 + $3,000 = $7,000

Personal Representative’s Fee: 4% of the first $100,000: $4,000 3% of the next $100,000 ($200,000 - $100,000 = $100,000): $3,000 Total Personal Representative’s Fee: $4,000 + $3,000 = $7,000

In this scenario, both the attorney and the personal representative would be entitled to receive $7,000 each from the estate. The statutory authority for these values are provided for in California Probate Code Sections 10800 and 10810.

In order to start a formal probate proceeding, you have to file a Petition for Probate, Form DE-111. The initial court filing fee is $465, although you can apply for a fee wavier if you can demonstrate financial hardship. You’ll also have to publicize the probate in a newspaper (cost varies), and when you close probate, the court filling fee for closing petition is another $465.

Another significant reason to avoid probate is its inherent lack of privacy. Once probate proceedings commence, anyone sufficiently motivated can access the filings and monitor the case’s progression through the court system. This transparency often leads to various industries, such as real estate, exploiting the process to seek out additional business opportunities, particularly when assets like real property are involved.

Furthermore, probate is notorious for its time-consuming nature, constituting another compelling rationale for avoidance. Full probate proceedings can drag on for several years, and in cases where disputes arise among parties, the process may extend even further, exacerbating delays and frustrations.

Regarding default rules in probate, a Will serves as a crucial tool for overriding them. When an individual passes away without a Will (referred to as dying intestate), certain default rules dictate the appointment of a personal representative or executor and determine the distribution of assets. Typically, these decisions are based on familial ties and relationships with next of kin. Consequently, if your preferred beneficiaries or individuals to manage your estate differ from your legal heirs, having a Will becomes imperative if probate is chosen as the route for estate administration upon your demise.

How does a Trust avoid probate?

Understanding how a trust circumvents probate traces back to a fundamental principle: when assets remain in your personal name at the time of your passing, probate becomes a necessity for their transfer. Once a trust is established, the subsequent step involves transferring or funding assets from your personal ownership to the trustee, who holds them in trust. For the vast majority of individuals who establish a revocable living trust, the trustee is typically the same person who created the trust and stands to benefit from it. While you retain control over the assets and retain the ability to utilize them freely during your lifetime, upon your demise, because ownership no longer vests in your personal name, probate becomes unnecessary as the estate holds no legal claim to the assets.


The above was just a bit of the surface level information comparing Wills and Trusts, but it should provide most people with a basic understanding of the difference between the two.

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