Episode 03
Will or Living Trust? The Honest Answer
Will or living trust? For a normal family, the better first question is what each asset would actually need when someone dies. One made-up Texas family, four assets, then an honest look at what a revocable living trust adds and what it costs.
Key points
- In Texas, and under the 2010 version of the Uniform Probate Code, a model law, a provision in an account, policy or retirement plan that pays a named person at death works outside the will. [F1, F2] Maryland’s registers of wills describe probate as covering what the person owned individually, other than assets passing by beneficiary designation, payable-on-death, survivorship or a revocable trust. [F3]
- What already skips probate depends on the paperwork and the state. In Texas, a joint account only passes to the other owner automatically if the paperwork includes a survivorship agreement signed by the owner who dies, and a community-property survivorship agreement has to be in writing and signed by both spouses. [F7, F12] Transfer-on-death deeds for a house exist only where the law allows them. [F8, F9]
- A revocable living trust can add a successor trustee if you can’t manage your affairs, a way to hold property for a child until a stated age, more privacy (not complete privacy), and possibly a way to avoid a separate probate for real estate in a second state, but only if that property is moved into the trust. [F20, F24, F27, F25, F26]
- Its limits: a living trust only works for what’s actually put into it, a trust plan generally still includes a will, it costs more up front, it doesn’t save taxes by itself, and Maryland’s guide says it can’t shield your own assets from your creditors. [F21, F22, F23, F29, F30, F32]
- The right answer depends on your assets, your family and your state. Maryland’s guide suggests asking an attorney for an estimate before work begins. [F29]
Episode notes
One family, four assets
Example family · fictional Here’s a made-up family, the Hollands, in Texas. Mike and Laura are married with three kids, and they own four big things: a 401(k), a couple of bank accounts, a house and a car. Some paperwork already sends an asset straight to the people named on it, outside probate. [F3] This page puts the four on the table one at a time, then looks at what a revocable living trust would add and what it would cost.
The question that started it
The episode started with a real question on Reddit’s estate planning forum, paraphrased here. Someone in Texas posted that their checking, savings, CDs, annuities and life insurance all have beneficiaries named. The house deed is in their name and their wife’s, and they have one car and three kids. Their question: should they get a revocable trust, or would a transfer-on-death option do the job on its own? We won’t answer that for them, but this page covers the questions a Texas attorney would look at.
Paperwork beats the will
Start with the rule from our first episode: for a lot of assets, the paperwork beats the will. In Texas, the Estates Code treats a provision in an insurance policy, retirement account or bank account that pays a named person at death as nontestamentary, meaning it works outside the will. [F2] The 2010 version of the Uniform Probate Code, a model law, says the same. [F1] And Maryland’s registers of wills explain that probate covers what the person owned individually, other than assets passing by beneficiary designation, payable-on-death, survivorship or a revocable trust. [F3]
The asset-by-asset map
Each row is one of the Hollands’ four assets: the paperwork that can send it outside probate in Texas, where it goes with that paperwork, and what our sources say without it. Untick a box to move a card, or read the full table below.
| Asset | Paperwork that can move it | With that paperwork | Without it | Law |
|---|---|---|---|---|
| Asset 1Mike’s 401(k)Federal law + Texas | A beneficiary form, plus the spouse rule many workplace plans follow. | Passes outside probate, with the paperworkPasses by its beneficiary form, not by the will. [F1, F2] Under federal law, many workplace retirement plans like 401(k)s must pay a married worker’s account to the surviving spouse unless the spouse signed a notarized or plan-witnessed waiver. [F5] | Depends: ask the plan and an attorneyUnder federal law, many workplace retirement plans like 401(k)s must pay a married worker’s account to the surviving spouse unless the spouse signed a notarized or plan-witnessed waiver. [F5] Beyond that spouse rule, our sources don’t say what happens to a retirement account with no beneficiary on file. Ask the plan and an attorney. | |
| Asset 2The bank accountsTexas | In Texas, a signed payable-on-death (POD) agreement, or a survivorship agreement signed by the owner who dies. | Passes outside probate, with the paperworkIn Texas, a payable-on-death account with a signed written agreement goes to the named payee when the last original owner dies. [F7] A joint account only passes to the other owner automatically if the account paperwork includes a survivorship agreement signed by the owner who dies. [F7] | May still end up in probateIn Texas, the word “joint” alone isn’t enough, and neither is “JT TEN.” [F7] Anything without working paperwork may still end up in probate. [F3] | |
| Asset 3The house, in both their namesTexas | In Texas, a transfer-on-death deed recorded before death. For community property, spouses can also sign a survivorship agreement, which has to be in writing and signed by both of them. [F10, F12] | Passes outside probate, with the paperworkTo work, a Texas transfer-on-death deed has to be recorded in the county deed records before the owner dies, and a will can’t revoke or override it. [F10] The beneficiary takes the house with its mortgage, and if the estate can’t pay its bills, the house can still be reached. [F11] | Depends: ask a Texas attorneyWithout a transfer-on-death deed or a survivorship agreement, what happens to a Texas couple’s house depends on details we won’t guess at here. That’s a question for a Texas attorney. | |
| Asset 4The carTexas | In Texas, the optional rights-of-survivorship agreement on the vehicle title, signed by the co-owners. | Passes outside probate, with the paperworkIn Texas, if co-owners sign it and one dies, the car belongs to the surviving owner, who transfers it with a copy of the death certificate. [F15] | May still end up in probateAnything without working paperwork may still end up in probate. [F3] When an owner’s estate isn’t probated, the Texas Department of Motor Vehicles requires a notarized Affidavit of Heirship for a Motor Vehicle (Form VTR-262). [F15] |
This is the first death only, for a made-up family. What happens when the surviving spouse later dies is its own question for an attorney. We only checked Texas’s rules for cars, so look up your own state’s.
A different starting point in the model law: under the 2010 version of the Uniform Probate Code, a model law, the default for joint accounts runs the other way: money in a joint account generally belongs to the surviving owner. [F6]
The house, in more detail
Texas only · rules vary by state
Texas is a community-property state: what either spouse acquires during the marriage is community property, other than separate property like gifts and inheritances. [F12, F36] There, if spouses want their community property to go to the survivor automatically, the survivorship agreement has to be in writing and signed by both of them. [F12] Without one, what happens to a Texas couple’s house depends on details we won’t guess at here.
Texas also allows a transfer-on-death deed for real estate, and during the owner’s life it changes nothing: they can still sell or mortgage the house. [F10, F11] To work, it has to be recorded in the county deed records before the owner dies, and a will can’t revoke or override it. [F10] The beneficiary takes the house with its mortgage, and if the estate can’t pay its bills, the house can still be reached. [F11]
Transfer-on-death deeds elsewhere, and joint tenancy
These deeds only exist where the law allows them. [F8, F9] Writing for the American Bar Association in September 2025, the Uniform Law Commission’s legislative counsel counted 32 U.S. jurisdictions that allowed them, so check whether yours does. [F9] She also warned that joint tenancy, another route, takes effect immediately, can’t be undone without both owners agreeing, and can expose each owner to the other’s creditors. [F9] And the Oregon State Bar says joint tenancy with the right of survivorship can be a way to avoid probate “on the death of the first joint owner.” [F4]
The scoreboard
With current beneficiary forms, signed agreements on the accounts, a recorded transfer-on-death deed and a survivorship agreement on the car title, all four of the Hollands’ assets could pass outside probate in Texas. [F2, F7, F10, F15] That’s at the first death; what happens when the surviving spouse later dies is its own question for an attorney.
But skipping probate doesn’t always skip debts: in Texas, estate debts can still reach a house passed by a transfer-on-death deed. [F11] And Maryland’s guide warns that if everything passes outside probate, there may be no money left for the funeral, final taxes and debts. [F33] And anything without working paperwork may still end up in probate. [F3, F22]
What does probate cost?
There’s no national price in our sources. Maryland’s own guide calls probate there “usually efficient and relatively uncomplicated.” [F19] In California, the law sets the probate attorney’s basic fee as a percentage of the estate’s value, without subtracting the mortgage. [F18]
The honest trust math
Now, a revocable living trust. The Consumer Financial Protection Bureau describes it as a legal document that lets a trustee manage the property in it if the person who made it can’t make decisions because of sickness or injury, and says who gets it after death. [F20] While still able to decide, and if its terms allow, the maker can change or revoke it. [F20]
What a trust can add
- If you can’t manage things. Maryland’s registers of wills say a successor trustee can take over if you can’t manage your affairs. [F24] A financial power of attorney can do that too and tends to be less complicated and expensive, but it ends at death. [F24] Maryland’s guide adds that a trust doesn’t replace a power of attorney for things outside the trust, like retirement accounts and income taxes. [F24]
- Kids. A trust can hold property for a child until a stated age instead of handing it over outright. [F27] California In California, a child who inherits a lot of money may need a court-supervised guardian of the estate until 18. [F27]
- Privacy, but not complete. Maryland’s guide says a trust normally stays off the public record, though it doesn’t guarantee complete privacy. [F25]
- Real estate in a second state. A trust may avoid a separate probate there, but the Oregon State Bar says only if that property is moved into the trust. [F26]
What it costs and can’t do
- Funding. The CFPB says a living trust is ineffective unless the person puts their money or property into it. [F21] For the Hollands, that would mean retitling the house, the bank accounts and the car into the trust’s name, and Maryland’s guide says some assets should not, or cannot, go in, and anything left out may still go through probate. [F22]
- Usually still a will. A trust plan generally still includes a will. [F23] Minnesota’s Attorney General says if the trust holds only part of your property, you need a will for the rest, and a will can name guardians for your children. [F23]
- More up front. Maryland’s guide says a trust will cost more than a will, though it may bring savings later if it’s properly set up and funded, and sometimes the setup costs outweigh those savings. [F29]
- No tax savings by itself. Under federal law, the person who made a revocable trust is still treated as the owner for income tax, and the property still counts as part of their estate for federal estate tax. [F30] For 2026 deaths, the IRS’s federal estate tax filing threshold is $15,000,000, and a revocable trust doesn’t change whether that tax applies. [F31, F30]
- No shield from your own creditors. Maryland’s guide says a revocable trust can’t shield your own assets from your creditors. [F32]
- Kits and sales pitches. Minnesota’s Attorney General warns that ready-made trust kits may be too generic, and to beware of workshops run to sell you something. [F35]
Three questions for your own family
Back to the Texas question from Reddit: trust, or a transfer-on-death option? These are general questions, not advice:
- Does every account have a current beneficiary or payable-on-death (POD) designation?
- Does your state allow a transfer-on-death deed, and how is your deed titled?
- Do you need someone to manage things if you can’t, or money held for kids?
Maryland’s guide suggests asking an attorney for an estimate before work begins. [F29] That’s how you can price both options.
Check your state’s rules
- Texas. The transfer-on-death deed rules are in Texas Estates Code chapter 114. [F10] The vehicle-title survivorship agreement is in Texas Transportation Code §501.031, and the Texas Department of Motor Vehicles explains it on Form VTR-122. [F15]
- Other states. The Uniform Law Commission’s page for its Uniform Real Property Transfer on Death Act describes the model law, which applies only where a state has enacted it. [F8, F9] The September 2025 count of 32 jurisdictions is dated, so check your own state’s law. [F9]
- Talk to a local estate-planning attorney about your own assets, your family and your state.
Sources
- Texas Estates Code chapter 111 (§111.052), Texas Legislature (Texas Constitution and Statutes)
- Texas Estates Code chapter 112 (§§112.051, 112.052), Texas Legislature (Texas Constitution and Statutes)
- Texas Estates Code chapter 113 (§§113.151, 113.152), Texas Legislature (Texas Constitution and Statutes)
- Texas Estates Code chapter 114, Transfer on Death Deed, Texas Legislature (Texas Constitution and Statutes)
- Texas Family Code chapter 3 (§§3.001, 3.002), Texas Legislature (Texas Constitution and Statutes)
- Texas Transportation Code §501.031, Texas Legislature (Texas Constitution and Statutes)
- 29 U.S.C. §1055, U.S. Code, via Cornell Law School Legal Information Institute
- 26 U.S.C. §676, U.S. Code, via Cornell Law School Legal Information Institute
- Estate tax, Internal Revenue Service
- Uniform Probate Code (1969), Last Amended or Revised in 2010, with Comments (PDF), §§6-101, 6-212, Uniform Law Commission (National Conference of Commissioners on Uniform State Laws)
- Uniform Real Property Transfer on Death Act (catalog entry), Uniform Law Commission
- Uniform Laws Update: The Uniform Real Property Transfer on Death Act (Probate & Property, Sept. 2025), Jane E. Sternecky, Uniform Law Commission, for the American Bar Association Section of Real Property, Trust and Estate Law
- Revocable Living Trusts: Get the Facts (PDF), Registers of Wills of Maryland
- Managing Someone Else’s Money: Help for trustees under a revocable living trust (PDF), Consumer Financial Protection Bureau
- Living Trusts (Probate and Planning handbook), Office of Minnesota Attorney General
- Revocable Living Trusts, Oregon State Bar
- California Probate Code §10810, California Legislative Information
- Guardianships in California (Self-Help Guide), Judicial Branch of California