Living Trust vs Will: Which Fits Your Estate Plan?
Quick Summary
A living trust is created during your lifetime and can manage assets while you are alive and if you become incapable, while a will takes effect only at death. A trust generally avoids probate for assets properly transferred into it, but most estate plans still need a will to name guardians for minor children and catch assets left outside the trust.
A living trust only controls assets actually transferred into it, so funding is essential.
A will usually goes through probate, while funded trust assets generally pass without that court process.
Probate filings are generally public, whereas a living trust is typically private.
A will is required to name a guardian for minor children, which a trust cannot do.
Most practitioners pair a living trust with a pour-over will to catch assets left in your name.
Table of Contents
What Is a Living Trust?
Last Updated: November 1, 2026
Estate planning decides who receives your property and who makes decisions for you if you cannot. A living trust is one of the main tools Canadians use.
A living trust is a legal arrangement you create during your lifetime. You transfer ownership of certain assets into the trust, and a trustee manages them for your benefit and for your beneficiaries.
Here is how the basic structure works:
Grantor: The person who creates the trust and transfers assets into it.
Trustee: The person who manages the trust assets according to its terms.
Beneficiaries: The people who receive the assets, now or later.
Successor trustee: The person who takes over if you become incapable or die.
The biggest practical point is funding. A trust only controls what has been transferred into it.
What a Will Does and How It Works
A will, sometimes called a last will and testament, is a legal document that states how your property should be distributed after your death.
A will generally takes effect only at death. Before assets can pass under a will, the court usually must confirm the document is valid and grant the executor authority to act. This step is called probate.
Wills remain the foundation of most estate plans, even when a trust is also in place. If you are wondering how the online process works and whether it is safe, see how to secure an online will.
Living Trust vs Will: Key Differences in Probate, Privacy and Control
The two documents differ most in three areas: probate, privacy and control.
Probate. A will usually goes through probate. Assets held in a properly funded living trust generally pass to beneficiaries without that court process.
Privacy. Probate filings are generally part of the public record.
Control. A living trust can manage your assets while you are alive and if you become incapable. A will has no effect until death.
Quick comparison
Feature | Living Trust | Will |
Takes effect | During life and at death | At death only |
Court process (probate) | Generally avoided for funded assets | Usually required |
Public record | Generally private | Probate filings are public |
Manages assets during incapacity | Yes | No |
Names guardians for minor children | No | Yes |
Upfront setup | Typically higher | Typically lower |
What Assets Cannot Be Placed in a Trust
A living trust only controls assets actually titled in the trust's name. Signing the document is step one; funding is step two, and it is where most do-it-yourself plans break down.
Assets that usually stay outside a trust, and why
Registered retirement savings plans, registered retirement income funds and tax-free savings accounts. These generally pass by beneficiary designation or, if none is named, through your estate. Naming the trust as beneficiary can have unintended tax consequences, so get advice first.
Life insurance policies. The named beneficiary receives the proceeds directly, outside both the will and the trust. Naming a trust as beneficiary is possible but should be deliberate.
Pensions and workplace plans. Plan rules often dictate who receives survivor benefits, and those rules override your will.
Joint accounts and assets held with a right of survivorship. These typically pass to the surviving owner automatically, outside the trust and outside probate.
Vehicles and some personal property. Registration rules vary by province, and retitling a vehicle into a trust can complicate insurance and licensing.
Assets you acquire after signing. A trust does not automatically capture future purchases. New accounts, new properties and refinanced mortgages all need to be retitled.
The funding mechanics most people miss
Real property. Your lawyer prepares a transfer to the trustee, and land transfer tax and registration rules apply. A mortgage lender may also need to consent.
Investment and bank accounts. The institution retitles the account into the trust's name. Some institutions have their own forms and timelines.
Business interests. Shares or partnership interests are transferred according to the governing agreement, which may require consent from other owners.
Digital and personal assets. Online accounts, loyalty points and personal effects may or may not be transferable; the trust terms should at least give the trustee authority to deal with them.
Watch Out A trust that is signed but never funded is sometimes called an empty trust. It provides little or no probate avoidance, because the assets it was meant to hold are still in your name and will pass under your will instead.
The pour-over will is the safety net
Most practitioners pair a living trust with a pour-over will.
Beneficiary designations can override everything
A common and costly pattern: a person funds the trust with the house and investment accounts, but leaves an old registered account naming a former spouse or an adult child as beneficiary.
A practical funding checklist
List every asset and its current title or beneficiary designation.
Mark which ones the trust should hold and which should stay outside.
Retitle the trust assets with each institution and keep confirmation letters.
Update beneficiary designations on registered accounts and insurance.
Sign a pour-over will to catch anything missed.
Revisit the list annually and after any major purchase or life change.
Assets left outside the trust may still pass under your will, so the two documents must work together. A short review with a lawyer or a lawyer-prepared service can confirm which assets belong in which document and whether funding is complete.
Choosing an Executor or Trustee
Choosing the right person matters as much as choosing the right document. An executor handles the estate under a will. A trustee manages the assets inside a trust. The two roles can be held by the same person or by different people.
When choosing, consider:
Trustworthiness and financial judgment
Willingness to take on the responsibility
Ability to handle record keeping and communication with beneficiaries
Whether they live nearby or can manage the work from a distance
Many people name a backup in case their first choice cannot serve. Discuss the role with your chosen person before you finalize your documents.
Total Costs, Incapacity Planning and Guardians for Minor Children
Cost is where the will-versus-trust comparison is most often oversimplified.
The four cost buckets to compare
Setup. A basic will typically costs less to prepare than a living trust, because a trust involves drafting trust terms plus retitling assets. A trust also usually needs a pour-over will, so the comparison is rarely will versus trust alone, it is will versus trust plus will.
Maintenance. A trust needs periodic review and retitling as assets change. A will needs updating after life events, but it does not require ongoing asset transfers.
Probate and estate administration. Probate fees, legal fees and timelines vary by province. Assets that pass outside probate, through a funded trust, beneficiary designations or joint ownership, generally avoid those probate costs, but executor and trustee fees, tax filing and legal work can still apply.
Ongoing trust administration. If the trust continues after your death, the trustee may need to file trust returns and keep records. That is real work, and it can be paid or unpaid depending on who serves.
Key Takeaway Probate avoidance is not tax avoidance. A basic revocable living trust generally does not, by itself, eliminate income tax on death, and it does not shield your assets from your creditors during your lifetime. Those are separate planning questions that need separate advice.
Where the money actually goes
A useful way to frame it: the will-based plan front-loads simplicity and back-loads court process; the trust-based plan front-loads paperwork and back-loads administration.
Incapacity planning: the trust is not a substitute
That is why a complete plan usually includes:
A power of attorney for property, so someone can pay bills, manage accounts and deal with property you have not placed in the trust.
A power of attorney for personal care, so someone can make health and personal-care decisions if you cannot.
A living trust, to manage trust assets during incapacity.
These documents overlap but do not replace one another.
Guardians for minor children
A will is the document that names a guardian for minor children. A trust cannot do this.
A quick decision frame
Simple estate, one province, adult beneficiaries: a will plus powers of attorney is often enough.
Home, investments and privacy concerns: a funded living trust plus a pour-over will and powers of attorney is worth pricing out.
Minor children: a will is essential for guardianship regardless of whether you add a trust.
Property in more than one province: a trust or multiple wills may reduce the need for probate in each province; get province-specific advice.
Blended family or business interests: the trust's distribution terms and the corporate or partnership agreements need to be coordinated.
Cost depends on the complexity of your estate and the documents you need. A basic will is usually less expensive to set up than a living trust.
Do You Still Need a Will If You Have a Trust?
In most situations, yes. A living trust does not replace a will. A will catches assets that were not transferred to the trust, names guardians for minor children and sets out your wishes if something unexpected happens. Many complete estate plans include both documents.
Your situation may be simpler or more complex than this overview suggests. Blended families, common-law relationships, business interests and property in more than one province all add layers that need careful planning.
Booking Your Free Consultation to Choose the Right Plan
Deciding between a living trust and a will is easier with professional guidance. Upper Canada Wills offers a free consultation delivered online across Canada. We review your assets, family situation and goals, then recommend the documents that fit. You can also browse our educational resources before you book.
Request Your Free Consultation and take the first step toward a plan that protects the people you care about.
Frequently Asked Questions
What assets cannot be placed in a trust?
Some assets are difficult or impossible to transfer into a living trust, and this depends on the asset and its terms. Registered retirement savings plans, registered retirement income funds and some insurance policies often name a beneficiary directly and are usually handled through that designation rather than the trust. Personal items may be listed in a will instead. Before assuming an asset is covered, check how it is titled and what the institution requires, and confirm the approach with a qualified professional during a consultation.
Do you still need a will if you have a living trust?
In most cases, yes. A living trust only governs the assets that were actually transferred into it. Anything left outside the trust, such as a vehicle, some bank accounts or personal belongings, would pass under your will or intestacy rules. A will is also where you can name guardians for minor children, which a trust does not do. Many estate plans use both documents so that each covers what the other does not.
Who should be the trustee of a trust?
A trustee manages trust assets and carries legal duties to the beneficiaries, so the choice should rest on trustworthiness, organization and willingness to act. Many people name a trusted family member or friend, sometimes with a backup, while others choose a professional trustee for complex estates. Consider whether the person can keep accurate records, handle finances and communicate fairly with beneficiaries. Discuss the role with the person before naming them.
Which is better: a living trust or a will?
Neither is better in every situation. A will is simpler and cheaper to create, and it is the document that names guardians and handles most estates. A living trust can help assets pass without probate and keep details more private, but it requires transferring ownership of assets and ongoing maintenance. Many Canadians benefit from a will at minimum, with a trust added when probate avoidance, privacy or incapacity planning matters. Your circumstances and province determine the right fit, so review them with a qualified professional.
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