Living Trust vs Will: Which Does Your Estate Actually Need?

Estate planning attorneys often recommend revocable living trusts regardless of client situation. Sometimes they're essential. Often, they're an expensive extra layer when simpler tools accomplish the same goals for less.

What each document does

Probate: why trusts are worth it for some

Probate is the court-supervised process of validating a will and distributing assets. In California, probate costs 4% of gross estate value ($40,000 on a $1M estate). In other states, it's much cheaper. In California, Florida, or any high-cost-of-probate state: trusts often pay for themselves if you own real estate.

When you probably don't need a trust

• Your state has simple probate (Texas, Missouri, Wisconsin)
• Your estate is primarily retirement accounts and life insurance (these transfer via beneficiary designation, bypassing probate)
• You have straightforward family situation (no blended family, no special needs dependents)
• Net worth under $500,000 in most states

The beneficiary designation substitute

For most people: instead of a trust, add TOD (transfer on death) or POD (payable on death) designations to all accounts — bank, brokerage, CDs. These transfer assets directly to named beneficiaries without probate, accomplish what a trust accomplishes for financial assets, and cost nothing to set up.