Living Trust vs. Will in Pennsylvania: Which One Do You Actually Need?

One question we frequently hear from Pennsylvania residents is: Should I have a will, a living trust, or both? The simple answer is that it depends.

Both are important estate planning documents that serve different purposes. A will communicates your wishes after death, while a living trust can help manage your assets during your lifetime and may allow your estate to avoid probate.

Instead of focusing on which is better, the real question should be which estate planning tools can best protect your family and help you achieve your goals. Below, we take a closer look at wills and living trusts. Learning about how each document works will help you decide what makes the most sense for your Pennsylvania estate plan.

What Is the Difference Between a Will and Living Trust?

What Is a Will?

A will is a legal document that dictates what should happen to your property when you die.

With a will, you can:

Name beneficiaries
Choose an executor
Leave specific bequests to family, friends, or charities
Nominate guardians for minor children
Provide instructions for handling your estate

Your will does not go into effect until after death. It also does not allow you to manage your assets or help avoid probate if you become incapacitated. Keep in mind that a will usually goes through probate.

What Is Probate?

Probate is the legal process for administering the estate of a deceased person. During probate, a court supervises the:

Validation of the will
Appointment of an executor
Payment of debts and taxes
Distribution of assets

Probate is not necessarily a bad thing. In Pennsylvania, probate can be straightforward and fairly quick. However, the probate process does involve:

Court filings
Administrative fees
Delays in distribution
Public records of estate assets

Many individuals seek ways to avoid probate whenever possible. Enter: the living trust.

What is a Living Trust?

A living trust, sometimes referred to as a revocable living trust, is a trust created during your lifetime.

You can use a living trust to:

Create the trust document
Move (“fund”) assets into the trust
Serve as the trustee
Name a successor trustee to take over if you die or become incapacitated

Because the trust owns the assets, they do not technically belong to you. Instead, they belong to the trust. Therefore, those assets can usually be distributed to beneficiaries without going through probate.

The trust remains in effect during your lifetime. After death, the trust continues until assets are distributed according to its terms.

How Does a Living Trust Work?

Think about all the accounts and property you own. Once you create a living trust, you transfer title of these assets to the trust. You can still use them as you always have. However, upon your death, your successor trustee can distribute assets according to the terms you provided in the trust document without approval from the probate court.

Will vs. Living Trust: Key Differences

Probate

The primary difference between a will and living trust centers around probate. A will typically requires probate. A living trust can help your estate avoid probate for assets held in the trust.

Privacy

Probate proceedings become a matter of public record. This means strangers can look up information about your estate. A living trust helps keep matters private. The administration of a trust occurs outside of the public court system.

Incapacity

A will does not provide for incapacity. If you become unable to manage your own financial affairs, a will does nothing to help. A living trust allows you to manage assets should you become incapacitated. A successor trustee can step in and manage trust assets without court intervention if you become ill or injured.

Minor Children

Here’s one advantage of a will. With a will, you can name guardians for minor children. You cannot nominate guardians with a living trust. Even many estate owners who create a living trust should still have a will to name guardians.

Asset Management

A trust can also continue to manage assets after death. Let’s say you want to leave assets to a minor child. With a trust, you could delay distribution until the child reaches a certain age. You could also structure distributions over time.

A simple will transfers assets to beneficiaries and has nothing to do with asset management.

When You Should Just Have a Will

Most people need a will. But do you need a trust in addition to a will? Many Pennsylvanians can get away with just a will. If you:

Have a modest estate
Have a simple family situation
Only own property in Pennsylvania
Are not concerned about probate
Want to provide instructions for asset distribution and nominating guardians

A will may be enough to reach your estate planning goals. Combine your will with powers of attorney and healthcare directives, and you’ve got a solid plan. However, to be sure what will best fit your specific situation, we encourage you to reach out to our Bethlehem estate planning attorney as soon as possible.

When to Create a Living Trust in Pennsylvania

You should consider a living trust if:

You own significant assets
You want to avoid probate
You own real estate in multiple states
Privacy is a concern
You want things to be as easy as possible for your family if you become incapacitated
You have a blended family
You want more control over when and how your beneficiaries receive assets

For instance, if you own a vacation home in another state, you could transfer it into your living trust. This could prevent your family from having to go through probate in two different states. Additionally, individuals who have remarried and have children from previous relationships often benefit from creating a living trust.

A Bethlehem Estate Planning Attorney Can Help

Deciding whether you need a will or should create a trust isn’t easy. However, an experienced Pennsylvania estate planning attorney can guide you. Keep in mind that there is no one-size-fits-all solution. What works for your neighbors may not be ideal for your family.