Testamentary Trust vs. Living Trust: Key Differences That Impact Your Family
Creating a Trust in Your Will vs. Creating a Living Trust: Part 1
You’ve likely heard that trusts help families avoid probate and protect assets for the people they love. You may have even spoken with an attorney who suggested including a trust in your will.
It sounds like a solid plan.
But here’s what many people don’t realize: a trust created in your will works very differently from a living trust you create during your lifetime—and that difference can significantly affect your loved ones.
Both options use the word “trust,” which makes them sound similar. But the experience your family will have after your death depends entirely on which type you choose. More importantly, each approach serves different goals.
In this two-part series, we’ll walk through what each type of trust actually does so you can make a decision based on what truly matters to you.
In Part 1, we’ll focus on what happens when you create a trust in your will—and help you clarify what you’re trying to accomplish.
What Happens When You Create a Trust in Your Will
A trust created in your will—called a testamentary trust—does not exist until after you die.
Your will might say something like:
“Upon my death, I direct that my assets be held in trust for my children until they reach age 25.”
This can provide important protections, such as controlling when and how your children receive their inheritance.
However, there’s an important tradeoff:
your family must go through probate court before that trust is ever created.
What Probate Looks Like in Practice
When a testamentary trust is used, your loved ones must first complete the probate process. This typically includes:
Locating and filing your original will with the court
Having the court formally appoint your executor
Notifying heirs and creditors
Identifying and valuing all assets
Paying debts and taxes
Preparing reports for court approval
Only after this process is complete can assets be transferred into the trust.
This process often takes months—and sometimes years.
During that time, assets may be inaccessible, which can create financial stress for your loved ones.
The Cost and Public Nature of Probate
Probate also comes with:
Court filing fees
Attorney fees
Appraisal and accounting costs
These expenses are paid from your estate, reducing what ultimately goes to your beneficiaries.
In addition, probate is a public process. Information about your assets and who receives them becomes part of the public record.
What This Means for Your Family
A testamentary trust can achieve certain goals—but it does so after your family has gone through court.
In many cases, families are:
Waiting for access to assets
Managing administrative tasks during grief
Navigating a legal system they may not understand
The trust eventually provides structure—but only after that process is complete.
What a Will Can’t Do While You’re Alive
Another important limitation:
A will—and a testamentary trust—only take effect after death.
They provide no protection during your lifetime.
If you become incapacitated, your will offers no authority for someone to step in. Many people rely on a power of attorney for this—but a power of attorney ends at death.
This creates a gap:
Authority exists during life (via POA)
Authority stops at death
Authority does not resume until the court appoints someone
During that gap, accounts may be frozen, and decisions may be delayed.
What Are You Really Trying to Accomplish?
Before choosing between a testamentary trust and a living trust, it helps to step back and ask:
What do you actually want your plan to do?
Here are a few key questions to consider:
Do you want to avoid probate?
If keeping your family out of court is important, this is a critical distinction.
A testamentary trust does not avoid probate
A living trust can
Do you want to control how assets are distributed?
Both types of trusts can:
Delay distributions
Protect younger beneficiaries
Structure inheritances over time
From a distribution standpoint, they can be designed similarly.
Do you want protection during incapacity?
This is where timing matters:
A testamentary trust offers no protection during life
A living trust can allow someone to step in without court involvement
Do you want your family to have immediate access to resources?
If timing and access matter, the structure of your plan becomes especially important.
Looking Ahead to Part 2
Understanding your goals is the foundation of good planning.
In Part 2, we’ll walk through how living trusts work—and how to decide which approach best fits your family, your assets, and your priorities.
How We Help You Identify What Matters Most
At Starsia Law, we focus on more than just documents. We focus on helping you create a plan that works in real life for the people you love.
Our Life & Legacy Planning® process begins with education—so you can understand exactly what would happen under different scenarios, both during your lifetime and after your death.
During your Life & Legacy Planning Session, we:
Review your current situation
Walk through real-life outcomes for your family
Identify gaps and opportunities
Help you clarify your priorities
Guide you in choosing the right planning approach for your goals and budget
With the right foundation, you can make confident, informed decisions—not just about documents, but about your legacy.
Schedule a complimentary 15-minute discovery call to learn how our team can support you and the people you love.
This article is a service of Starsia Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.