Trust or probate? How to read the document on the kitchen table

The first conversation with a new family is rarely a legal one. It's a sorting conversation: what document is on your kitchen table? If it's a will, you're heading into probate. If it's a revocable trust — and the trust was actually funded — you're probably not. The path that follows is genuinely different, and confusing them costs families months.

What a will does

A will is a set of instructions for the probate court. It names a personal representative, identifies beneficiaries, and tells the court how to distribute the estate. The document itself has no force until the court admits it; until then, it's a piece of paper with wishes on it.

What a trust does

A revocable living trust holds title to assets during the grantor's life and continues to hold them after. When the grantor dies, the named successor trustee — sometimes the same person who would have been personal representative, sometimes not — takes over. Probate is bypassed entirely for assets the trust owns.

The mixed case

Most estates are mixed. The home was put in the trust; the bank accounts weren't. The 401(k) has named beneficiaries that bypass both. The car is titled jointly. In a mixed estate, the trustee handles the trust assets, the personal representative opens probate for what's left, and beneficiary-designated assets pass directly. These can run in parallel.

The capital gains advantage

Assets that pass under a will and assets held in a revocable living trust both get a reset of cost basis to date-of-death value — a meaningful advantage where the home has appreciated. Assets in an irrevocable trust generally do not, because the grantor gave them away during life and they are not in the taxable estate. What the reset does not do is reward speed: the basis is the same whether the estate sells the home or a beneficiary takes it and sells later, so "sell quickly for the tax benefit" is not the advantage it is usually described as. Where timing does matter is who reports gain arising after the death, since estates and trusts hit the top rates at very low income levels. A tax-aware attorney or CPA is worth their fee on this question, every time.