Quick answer: Probate is a court process for what is in your name alone. A living trust is a private arrangement that covers only what you put into it. A trust generally costs more to set up than a will, while probate costs come after death and vary by state, so the cheaper route depends on your situation. A trust also does not protect assets from creditors, Medicaid or taxes, and anything left out of it may still need probate.
On this page:
- Probate and a living trust side by side
- Which costs more
- What a living trust does not do
- When a trust makes sense, and when it does not
- Compare them for your state
Probate and a living trust side by side
Both get property to your heirs, but they work very differently. Probate is the court process that settles what you owned in your own name. A revocable living trust is a document you sign in life, then transfer property into, and its trustee can hand that property to your beneficiaries after your death without going to court. Our guide on how to avoid probate puts the trust next to six other tools. Here it is compared with the plain will-and-probate route.
| Will, then probate | Living trust | |
|---|---|---|
| What it covers | Property in your name alone, with no co-owner or beneficiary attached | Only the property you transfer into the trust |
| Cost to set up | The cost of writing a will | Generally more than a will |
| Cost after death | Court fees, executor and attorney fees, and other costs | Trustee fees if a financial company serves; no probate costs for what the trust owns |
| Court involvement | Yes | Not required to administer the trust |
| Privacy | Probate cases are generally public record | Distribution is private |
| If you become incapacitated | A power of attorney is needed | A successor trustee can manage the trust property |
Which costs more
The Minnesota Legal Services Coalition says it generally costs more to set up a living trust than a will. The lawyer's drafting is more complex, moving property into the trust takes work (especially real estate), and a financial company acting as trustee charges fees. The same fact sheet adds that for someone with a lot of assets who cannot avoid probate another way, a trust may end up cheaper than a will, because a will has to go through probate.
So the comparison is between two bills that arrive at different times: the cost of building and funding a trust now, and the cost of probate later. What probate costs depends heavily on the state, since some set fee schedules and others use a reasonableness standard. See how much probate costs for what drives that number. The Probate vs Living Trust Calculator puts the two side by side for your state, and the Probate Cost Calculator shows the probate side on its own.
What a living trust does not do
- It does not cover assets you leave out. The Colorado Bar Association explains that if a trust is not properly funded, the assets outside it have to be moved into the trust through a pour-over will and a probate action. Some assets should not go into the trust at all: the Minnesota fact sheet notes that an IRA has to stay in your name.
- It does not shield you from creditors. In states that follow the Uniform Trust Code, the property of a revocable trust is subject to the settlor's creditors during life, and after death to the extent the probate estate is inadequate to satisfy claims, administration costs, funeral expenses and family allowances. North Carolina's statute says the same.
- It does not protect assets from Medicaid. The Minnesota fact sheet says a living trust generally does not shield assets if you need long-term care, because the state treats the trust's assets as available to pay for it.
- It does not change how estate tax is measured. For federal estate tax the IRS looks at everything the person owned or had certain interests in at death, including trusts, so what matters is the value of the estate, not whether it goes through probate.
When a trust makes sense, and when it does not
A trust tends to earn its cost in particular situations. The Air Force Academy's legal office says living trusts offer extra benefits particularly when the owner has real estate in different states or becomes incapacitated. For incapacity, the Colorado Bar Association notes that the trustmaker can name a successor trustee to manage the trust property, which the same Air Force Academy office says can spare loved ones from going to court to be appointed guardian or conservator. The Minnesota fact sheet adds that a trust can make sense when you want to leave property to many people or limit how someone can use money you leave them. Where property sits in other states, see also ancillary probate.
It is often not worth it for a small estate. The same fact sheet says a trust is probably not a good idea if you do not own real estate or many financial assets, because a power of attorney can manage them in life and beneficiary designations can pass them at death. It also warns that trusts can be confusing and expensive, that there are often easier ways to avoid probate, and that anyone pressuring you to buy a trust package is a red flag. It recommends talking to a lawyer first. To see whether you would even face probate, start with whether you need probate at all.
Compare them for your state
The right answer changes with your state's probate costs and your own assets. Use the Probate vs Living Trust Calculator for the comparison and the Estate Value Calculator to see what would actually be subject to probate. The probate calculators page has the rest, and our methodology explains how each figure is checked.