Difference in Terms
Each legal instrument has different terms. With a living trust, the estate owner (and person drafting the document) is referred to as a “settlor.” The settlor transfers his assets to the living trust. Typically, the settlor names himself as the trustee, or person in charge of the assets. The settlor will usually appoint a successor trustee, who will assert control over the assets upon the settlor’s death or incapacitation. With a will, the person drafting the instrument and holding the assets is called a “testator.” The testator typically appoints a personal representative who will probate the will upon the testator’s death. Upon death, the testator is called a “decedent.”
Difference in Probate
A major difference between a living trust and will is that a will must go through probate. Probate is a legal proceeding in which the court verifies the will’s authenticity and oversees the personal representative as she administers the estate. The personal representative must take an inventory of the estate, pay all debts and taxes, and then distribute the estate’s assets following the will’s directions. A living trust does not have to be probated. Accordingly, the successor trustee transfers the trust assets based on the conditions the settlor set out in the trust’s declaration.
Difference in Privacy
In Texas, once a will goes to probate, it becomes a public record. While privacy may not be a paramount concern for all estate holders, others regard privacy as important. The will, the estate inventory and all relevant court documents become public. For individuals who value privacy in the administration of their estate, a living trust may solve this issue.
Difference in Challenges
Generally, it may be more difficult for an heir to challenge a living trust than to challenge a will. For example, if an heir challenged the terms of a living trust, the settlor can testify on her own behalf. This idea is not possible during probate because the estate owner has passed away by the time the will goes to probate.