Living versus testamentary trusts — what's the difference?

Living trusts — formally called revocable living trusts — are created by the grantor during their lifetime. Anyone who wants to start a trust while they're alive can establish one, fund it, and amend it whenever they like. Testamentary trusts, on the other hand, are created by the grantor's will. They don't exist as legal entities until the will becomes effective, which happens only at the grantor's passing.

An easy way to remember the difference: a living trust starts while you're living, and a testamentary trust starts after you've died. That single timing difference changes how the trust interacts with the courts, how private it remains, and how quickly assets reach the people you intended.

Living trusts have a major practical advantage: assets properly titled into a living trust avoid probate entirely. Your trustee can step in and administer those assets without filing anything with the court — keeping the process private, faster, and far less expensive for your family. Testamentary trusts, by contrast, must travel through probate before they're funded, because they only come into being once the will is admitted to probate.

That doesn't mean a testamentary trust is the wrong choice — for some families, especially those leaving inheritance to young or vulnerable beneficiaries, a will-based trust is exactly the right structure. But understanding the trade-off lets you make a deliberate decision rather than discovering, years later, that your family is sitting in a probate hearing that could have been avoided.

There is no single 'best' trust — only the trust that matches your goals, your assets, and the people you want to protect. Some clients benefit from a fully funded living trust holding real estate, investment accounts, and business interests. Others use a simple will with one or more testamentary trusts inside it to manage funds for minor children. Many do both.

Nicole walks through the actual contents of your estate, the ages and circumstances of your beneficiaries, and the level of court involvement you're comfortable with — then designs the trust structure that gives you the most control with the fewest surprises.