Testamentary Trusts vs. Living Trusts: What’s the Difference—and Which Fits Your Family?

When people hear “trust,” they may not know that there are trusts are effective while you are alive, i.e. “living trusts” and trusts that spring into existence when you pass away, i.e. “testamentary trusts”. Understanding how they work—especially the role of probate, funding, cost, privacy, taxes, and control—can help you choose the right tool for your goals.

Quick definitions

• Testamentary trust: A trust inside your will. It does not exist until you pass away, the will is admitted to probate, and your executor funds the trust according to your instructions. Common example: a minor’s trust that holds money for children until specific ages.
• Living trust (revocable living trust): A trust you create now, while you’re alive. You can be your own trustee, change it, or revoke it. It can receive assets during life and continue seamlessly at incapacity and death.

(Irrevocable living trusts also exist—for asset-protection, Medicaid, or tax strategies—but this article focuses on the everyday comparison clients ask about: testamentary vs. revocable living trusts.)

Probate: required vs. avoidable

• Testamentary trust = probate required. Because the trust is contained in your will, a Surrogate’s Court must admit the will to probate first. Only then can the executor move assets into the testamentary trust. That means timelines, court filings, notices to heirs, and a public record.
• Living trust = probate minimization (if funded). Properly funding a revocable living trust during life—retitling your real estate and accounts to the trust—lets those assets pass to beneficiaries without probate. Your “pour-over will” catches anything left outside the trust and pours it in later (that portion still goes through probate).

Key takeaway: If avoiding probate delays, costs, and publicity is a priority, a funded living trust is the more efficient vehicle.

Funding and follow-through

• Testamentary trust: Requires no funding during life. Your executor transfers assets into the trust after probate.
• Living trust: Works only if you fund it—by retitling assets, updating beneficiary designations (as appropriate), and recording new deeds for real property. Many plans underperform simply because funding never got finished. A good estate planning process includes a clear funding checklist and help getting it done.

Privacy and speed

• Testamentary trust: Your will (and, by extension, the trust terms inside it) generally becomes part of the public probate file. Distributions can be slowed by court timing and required notices.
• Living trust: Typically private, with administration handled by your successor trustee without court supervision. This often results in faster access to funds for loved ones.

Incapacity planning

• Testamentary trust: Offers no lifetime management; it doesn’t exist until death. You’ll still want a durable power of attorney and health care proxy for incapacity.
• Living trust: Shines here. If you become ill or incapacitated, your successor trustee can step in and manage trust assets without a court guardianship.

Costs

• Testamentary trust: Usually lower upfront legal cost because you’re creating trusts inside a will. Administration costs arrive after death and include probate.
• Living trust: Typically higher upfront cost because you’re building a full non-probate structure and doing funding work. But many families recoup that investment through reduced probate involvement, fewer delays, and smoother administration.

Control, protection, and taxes

• Both options can include sophisticated controls: age-based distributions for children, incentives for education or work, staggered payouts, and spend-thrift protections against a beneficiary’s creditors and divorcing spouses (once assets are in trust for that beneficiary).
• Revocable living trust: As long as the grantor is alive and the trust is revocable, it generally does not shield the grantor’s assets from the grantor’s own creditors, lawsuits, or long-term-care spend-down. Think of it as a probate-avoidance and management tool, not a personal asset-protection device.
• Testamentary trust vs. living trust for taxes: For most families, the choice between testamentary and revocable living is not primarily a tax decision. Both can be drafted to use tax-efficient formulas if needed. If your goals include asset protection or advanced tax/Medicaid planning, you may layer in irrevocable trusts.

Common use cases

Choose a testamentary trust when you:

• Want a straightforward will and don’t mind probate.
• Prefer to delay costs until after death.
• Need minor’s trusts or simple age-staggered distributions without changing how you hold assets today.
• Have a relatively small probate estate and beneficiary designations already in place for major accounts.

Choose a revocable living trust when you:

• Want to avoid probate and keep your plan private.
• Own real estate (especially in multiple states) and want to bypass multiple probates.
• Value continuity at incapacity—a successor trustee can pay bills and manage investments without court involvement.
• Have a blended family, business interests, or beneficiaries who need long-term management.
• Prefer to streamline administration for your spouse or adult children.

(If you’re caring for a loved one with special needs who receives or may receive public benefits, you may also need a Special Needs Trust—which can be drafted as testamentary or living, depending on circumstances.)

What about a “pour-over will”?

Even with a living trust, you’ll still sign a pour-over will. It names the same guardians for minor children and “pours” any stray assets into your trust at death. Assets caught by the pour-over will do go through probate; that’s why proactive funding is so important.

Picking the right path

There’s no one-size-fits-all answer. A young couple with modest assets and young children may prefer a will with minor’s trusts and simple beneficiary designations. A family that values speed, privacy, and incapacity planning may lean toward a revocable living trust, especially if they own a home (or more than one) in New York or out of state. Many New Yorkers end up choosing a living trust for efficiency—and then add focused irrevocable trusts when asset-protection or Medicaid planning becomes a priority.

How we can help

At the Law Offices of Roman Aminov, P.C., we draft both testamentary trusts and living trusts for clients across Queens, Brooklyn, and the greater New York City area. We guide you through funding and tailor trustee powers and distribution standards to your family, values, and assets. Most importantly, we make sure your plan is practical—so it works the way you intend when it matters most. For a free consultation with an experienced estate planning attorney, call Roman Aminov today at 347-766-2685.

For help planning your trust contact the Law Offices of Roman Aminov, P.C. at 347-766-2685 for a free consultation to discuss your matter.