Estate planning is not just about how to distribute assets after your passing. It is also about keeping things private, avoiding delays, and staying in control.
It’s important to know the difference between a will and a trust, and how to choose the best option for you. This is especially true if you have complex finances, which may include managing multiple-state real estate, navigating family business succession planning, or holding RSUs (restricted stock units) and concentrated stock.
This article compares a revocable living trust and a will, and explores the advantages of a living trust. The information can help you decide which option may be the right fit for your estate planning goals.
What is a will?
A will is a legal document that outlines how your assets should be distributed after death. It also allows you to name guardians for minor children and appoint an executor to manage your estate.
A pour-over will is often used with a trust. It makes sure that any remaining assets not in the trust go into it upon your death.
A testamentary trust is created by a will and goes into effect after death. It can help distribute assets for beneficiaries, like minor children or those who need regular payments.
What Is a revocable living trust?
A revocable living trust, or revocable trust, is a flexible estate planning tool. It helps manage and distribute your assets while you are alive and after you die, without going through probate court proceedings. Probate is a public and typically long legal process for validating a will and administering an estate.
With a trust, you retain full control while alive and retain the ability to amend or revoke the trust at any time. Upon death, your chosen trustee manages distributing assets according to your instructions, often bypassing probate entirely, ensuring your privacy.
Advantages of a revocable trust
In addition to probate avoidance and privacy protection, a living trust is a vital incapacity planning tool, as it is in effect immediately and can allow for the seamless transition from you to your trustee. Incapacity is when a person cannot make informed choices about their money, health care, or legal issues due to illness, injury, or mental decline.
In addition, trusts can allow for more control over how and when assets are distributed, such as staggered or incentive-based distributions. A trust is often the better fit for individuals who have minor children or those that would benefit from protections, multiple properties, a family business, equity compensation, or alternative investments. As trusts avoid probate, they allow for privacy in estate planning.
If you choose to set up a trust with a corporate trustee requiring ongoing administration, there may be some added cost.
Tax considerations
While a revocable trust doesn’t inherently provide tax savings, it supports broader estate planning strategies. Assets in a revocable trust usually get a step-up in basis when someone dies. This can lower capital gains taxes for heirs.
For larger estates, it may be helpful to look into other tools. These include irrevocable gifting trusts, GST tax planning, portability, and charitable remainder trusts. These tools can help minimize estate taxes and support philanthropic goals, but they require careful coordination with tax professionals. Learn more here: What Type of Trust Is Right For You?
Helpful protections
Certain scenarios can help reveal revocable trust pros and cons. For instance, if you own property in multiple states, a trust can help you avoid ancillary probate in each jurisdiction.
In cases of divorce and remarriage, trusts can protect children from prior relationships and ensure assets are distributed according to your wishes.
Retirement accounts may benefit from see-through trusts, which comply with the SECURE Act and preserve tax deferral opportunities for beneficiaries.
Costs and Timelines
| Planning Tool | Typical Setup Cost via Private Firm | Ongoing Costs |
| Will | $500–$3,000 | Minimal |
| Revocable Trust | $2,000–$10,000+ | Depending on design can have trustee fees, legal updates |
Costs vary depending on your state and the complexity of your estate. The advantages of a revocable trust can often justify the higher initial investment for many estates.
How to choose
Choosing between a will and a trust depends on your priorities. Who needs a trust instead of a will? If avoiding probate, maintaining privacy, and controlling distributions are important to you, a trust is likely the better fit. If simplicity is your main concern, a will may suffice.
For example, an entrepreneur with an illiquid business may benefit from a trust that allows for structured distributions. A bi-coastal homeowner can avoid multi-state probate with a trust. A blended family with minor children may need a trust to ensure equitable and protected distributions.
Implementation checklist
Once you’ve chosen your estate planning path, it’s important to follow through with proper implementation.
- Draft the necessary documents, including your revocable trust, pour-over will, powers of attorney, and healthcare directives.
- Fund the trust by retitling real property, financial accounts, and business entities.
- Update your beneficiary designations. Make sure your estate plan works well with your insurance, tax, and gifting strategies. This will help everything fit together smoothly.
Quick comparison
| Feature | Will | Revocable Living Trust |
| Probate and Timelines | Requires probate; can take months to over a year | Can avoid probate; faster asset distribution |
| Privacy of Distributions | Public court filings | Private administration |
| Incapacity Planning | No coverage; separate Powers of Attorney needed | Built-in incapacity provisions |
| Cost to Set Up and Maintain | Lower upfront cost | Potential higher initial cost; potential ongoing maintenance, based on design |
| Funding Requirements | No funding needed | Requires funding (retitling assets) |
| Multi-State Property Implications | May trigger multi-state probate | Can avoid ancillary probate in other states |
How Mercer Advisors can help
Our estate and tax specialists can collaborate with your Mercer Advisors wealth advisor to help ensure your plan is comprehensive and coordinated. We can also provide corporate trustee services.
Not a Mercer Advisors client? We offer comprehensive wealth management that includes estate planning, financial planning, investment management, tax planning and preparation, and insurance solutions. If you have questions, let’s talk.
Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.
All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. The hypothetical example above is for illustrative purposes only. Client experiences will vary, successful outcomes are not guaranteed.
For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
Mercer Advisors is not a law firm and does not provide legal advice to clients. All estate planning document preparation and other legal advice is provided through select third parties unaffiliated with Mercer Advisors. Tax preparation and tax filing are a separate fee from our investment management and planning services. Mercer Global Advisors has a related insurance agency. Mercer Advisors Insurance Services, LLC (MAIS) is a wholly owned subsidiary of Mercer Advisors Inc. Trustee services are offered through select third parties with which a client would engage directly, as such additional fees may apply.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER® certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
