Both living trusts and testamentary trusts are valid estate planning tools, but they differ in one fundamental way: when they are created. A living trust is created and takes effect while you are alive, while a testamentary trust is written into your will and only takes effect after you die. That timing difference drives multiple factors, including whether your estate avoids probate, whether your plan stays private, how much control you keep, and what your family ultimately inherits.
Syracuse estate planning attorneys Frederick P. Davies and William P. Davies help families create estate plans that reflect their goals, assets, and long-term concerns. Our work includes helping clients understand how different planning tools, such as living trusts, testamentary trusts, and wills, may affect probate, privacy, and asset management.
This guide explains how living trusts and testamentary trusts differ in New York, including when each takes effect, how probate applies, and what each costs. To determine which trust structure fits your estate planning goals, schedule a consultation with Davies Law Firm at (315) 472-6511. We can review your assets, family needs, and probate concerns before you decide how to move forward.
What Is the Difference Between These Two Trusts?
A living trust is a legal document you create and sign during your lifetime, and it begins working as soon as you fund it. A testamentary trust does not exist while you are alive, because it is a set of instructions inside your will that only takes effect after the trustor’s death. Both trusts have the same job: they hold assets and manage them for your beneficiaries.
A living trust can be revocable, which means it can be changed over time. A testamentary trust, by contrast, is fixed once it comes into being, because the person who created it has already passed away. The table below summarizes the practical differences.
| Feature | Living Trust | Testamentary Trust |
|---|---|---|
| When created | During your lifetime | After death, through a will |
| Takes effect | Immediately upon proper signing and funding; controls only assets transferred to the trust. | After the will is admitted to probate and the court authorizes the fiduciary or trustee. |
| Requires probate | No, for assets properly transferred to the trust. | Yes |
| Privacy | Private document | Public court record |
| Can be changed | Yes (if revocable) | No (creator is deceased) |
Key Takeaway: A living trust is created during your lifetime and controls assets properly transferred into it, while a testamentary trust is written into your will and only comes into existence after you die and your estate passes through probate.
When Does Each Trust Take Effect in New York?
A living trust is created during your lifetime, while a testamentary trust cannot take effect until your will clears the Surrogate’s Court probate process.
How Does a Living Trust Take Effect?
A living trust takes effect as soon as you sign it and transfer assets into it, a process called funding. Until assets are properly transferred into the trust, the trust does not control those assets.
Funding involves transferring ownership of your assets to the trust. This can include retitling bank accounts, brokerage accounts, and real estate deeds. Under New York law, only assets actually held in the trust’s name are governed by the trust’s terms.
A funded living trust also offers an immediate benefit that a testamentary trust cannot: incapacity planning. If you become unable to manage your affairs, your named successor trustee can step in and handle the trust assets without going to court. This continuity is a primary reason people choose a living trust.
How Does a Testamentary Trust Take Effect?
A testamentary trust takes effect only after death, once the will has been admitted to probate and the court authorizes the appropriate fiduciary or trustee. Until that happens, the trust does not exist and holds no assets.
In New York, the will must be filed with the Surrogate’s Court in the county where the person lived. The court verifies the will, appoints an executor, and authorizes the executor to administer the estate. Only after the will is admitted to probate and the proper fiduciary has authority can estate assets be transferred into the testamentary trust.
Because the trust depends on probate, every delay in the court process delays the trust. A will must meet New York’s execution requirements under EPTL § 3-2.1 to be valid, and any challenge to those formalities can stall the entire plan.
Does a Living Trust Avoid Probate in New York?
Yes. A properly funded living trust can help avoid probate because assets transferred into the trust can pass under the trust terms without New York Surrogate’s Court approval. A testamentary trust does not avoid probate because it is created through a will, and the will must be admitted to probate before the trust can take effect.
Probate is the Surrogate’s Court process for admitting a will and authorizing estate administration. It can involve court fees, attorney costs, delays, and public court records. For this reason, trust funding is important. Assets left outside a living trust may still need to pass through Surrogate’s Court, although a pour-over will may be used as a backup to direct unfunded assets into the trust after death.
A testamentary trust, by design, requires probate. The estate must pass through the court before the trust can receive assets, adding time, cost, and public exposure that a properly funded living trust may help avoid.
Key Takeaway: A properly funded living trust may help avoid probate for assets transferred into the trust. A testamentary trust requires probate before it can receive assets, which can add time, cost, and public exposure through New York’s Surrogate’s Court.
How Do These Trusts Compare on Privacy in New York?
A living trust can offer more privacy because it is not filed with the court as part of probate. Its terms, beneficiaries, and asset details can remain outside the public court record.
A testamentary trust offers less privacy because it is created through a will. When the will is admitted to Surrogate’s Court, the trust provisions in the will become part of the probate record and may be available to the public.
For blended families, business owners, or Syracuse families concerned about privacy, this difference can matter. A living trust may help keep more estate planning details out of the public record.
Syracuse Estate Planning Attorney – Davies Law Firm
Frederick P. Davies, Esq.
Frederick P. Davies built his legal career on a foundation of public service, estate planning, and elder law. After earning his Bachelor of Arts in political science from the University of Vermont in 1982 and his Juris Doctor from the Syracuse University College of Law in 1985, he was admitted to practice in New York and Connecticut, as well as before several federal courts, including the United States Supreme Court and the United States Tax Court.
His early work as a Judge Advocate in the United States Navy JAG Corps gave him both courtroom experience and a practical understanding of legal planning for individuals and families. After returning to Central New York, Attorney Davies founded Davies Law Firm, P.C. in 1993 to focus on estate planning, living trusts, probate, long-term care, Medicaid, and taxation. Over the course of his career, he has remained active in professional organizations and has presented numerous seminars on estate planning, elder law, Medicaid, and long-term care.
William P. Davies, Esq.
William P. Davies earned a Bachelor of Arts in political science from the College of Saint Rose, a Juris Doctor from Albany Law School, and an LL.M. in estate planning from the University of Miami School of Law. At Albany Law School, he received a full academic scholarship, served on the Albany Law Review, earned a Sponsler Fellowship for placing in the top 10% of his class, and interned for the Honorable Mae A. D’Agostino of the United States District Court for the Northern District of New York.
Mr. Davies is admitted to practice in New York and Florida. His legal writing has appeared in the Albany Law Review and the Syracuse Law Review; furthermore, his article on New York’s Statutory Power of Attorney was cited in McKinney’s commentary. He has presented for legal and professional organizations on New York probate, estate planning, adult capacity, and power of attorney issues. He also served as President of the Estate Planning Council of Central New York from 2023 to 2024.
Can You Change or Revoke Each Type of Trust?
A revocable living trust can be changed or revoked at any time while you are alive. With a revocable living trust, you keep full control. You can amend it as your family grows, restate it after a major life event, or revoke it if your plans change. As the trustor, you serve as your own trustee and direct the trust’s assets during your lifetime.
A testamentary trust offers no such flexibility once it activates. A testamentary trust cannot be changed after the trustor’s death, and the trust terms control once the court admits the will. During your lifetime, you can amend your will or create a new one with a completely new set of testamentary trust provisions but after death, the provisions are locked in as they were written.
Not all living trusts are revocable. An irrevocable living trust cannot be amended or revoked as freely as a revocable trust, which is a tradeoff people accept in exchange for benefits like asset preservation or Medicaid planning. Under EPTL § 7-1.16, a lifetime trust is irrevocable unless it expressly states that it is revocable.
Key Takeaway: A revocable living trust gives you full control to amend, restate, or revoke the trust at any point while you are alive. A testamentary trust offers no post-death flexibility: once the trustor dies and the trust is created through probate, its terms are fixed.
Which Trust Costs More to Set Up in New York?
A living trust often involves higher upfront costs than a will with a testamentary trust. This is because a living trust may require more detailed drafting and additional steps to transfer appropriate assets into the trust. Funding the trust involves retitling financial accounts, preparing deeds for real property, or updating beneficiary and ownership records.
A will with a testamentary trust may cost less to prepare initially because the trust does not come into existence until after death. Since there is no trust to fund during your lifetime, there may be fewer immediate administrative steps. However, a testamentary trust is created through the probate process, which may involve court filing fees, attorney fees, administrative requirements, and delays before assets can be distributed or placed under trust management.
For some estates, a properly funded living trust will reduce later costs by avoiding probate for major assets. For others, the lower initial cost of a will with a testamentary trust may be more practical. The more economical option depends on factors such as the value and complexity of the estate, the types of assets involved, New York probate costs, and your long-term planning goals.
The cost difference often depends on when you want to spend the money. A living trust costs more to create and fund upfront, but it reduces later expenses by keeping major assets out of probate. A will with testamentary trust provisions costs less initially, but these savings can be lost if the estate goes through probate. For those who prefer creating a trust, it is often the more practical choice. But when the estate does not have enough assets to justify the added cost of a trust, a will without trust provisions is sufficient.
What Are the Best Uses for Each Trust?
The right choice depends on your goals. Living trusts suit people who want to avoid probate, maintain privacy, and plan for incapacity. Testamentary trusts suit people who want simpler upfront planning or built-in court oversight for certain beneficiaries.
When Is a Living Trust the Better Choice?
A living trust makes the most sense in the following situations. Each one reflects a distinct planning priority:
- Multiple properties: You own several properties and want to keep those assets out of probate.
- Real estate in more than one state: You own property in multiple states. Placing each property in the trust will avoid separate ancillary probate proceedings in those states.
- Privacy concerns: You want to keep your estate plan and the distribution of trust assets outside the public probate record.
- Blended family considerations: You have a blended family and want clear instructions for how trust assets will be managed and distributed.
- Incapacity planning: You want a successor trustee to manage trust assets if you become unable to do so, which can avoid the need for court-appointed guardianship over those assets.
When Is a Testamentary Trust the Better Choice?
A testamentary trust may be appropriate when an individual wants a simpler estate plan during life and does not need the trust to take effect immediately. This option may appeal to young people with modest estates who want to keep current planning costs and administration limited, while understanding that the trust will be created through the probate process after death.
It can also appeal to parents of minor children who want Surrogate’s Court oversight of how a child’s inheritance is managed. The court’s involvement, while slower, adds a layer of supervision some families value.
Key Takeaway: Living trusts may be better for clients who want to avoid probate, maintain privacy, and plan for incapacity. Testamentary trusts work well when court oversight of beneficiaries (such as minors) is desirable, or when upfront simplicity is the priority, though they require probate first.
Do Both Trusts Work With a Will in New York?
Yes. A living trust works alongside a “pour-over will,” while a testamentary trust is part of the will itself. A pour-over will directs that any asset you failed to transfer into the trust during your lifetime “pours over” into the trust at death. This acts as a safety net, though those poured-over assets may still need to pass through probate first.
A testamentary trust is different because it lives entirely inside the will. There is no separate trust document; the trust provisions are written into the will and activate only after probate.
Speak to a Syracuse Estate Planning Attorney
Choosing between a living trust and a testamentary trust depends on your assets, family circumstances, and goals for probate, privacy, and control.
Frederick P. Davies and William P. Davies have guided families throughout Syracuse and Central New York through these decisions, drawing on decades of experience in trust law. At Davies Law Firm, our attorneys explain your options clearly and draft estate planning documents that reflect your stated goals.
Call us at (315) 472-6511 to schedule a telephone conference. Our office at 210 E Fayette St in Syracuse serves families across Onondaga County and the wider Central New York region.
Frequently Asked Questions About Living Trusts and Testamentary Trusts
Can I have both a living trust and a testamentary trust in New York?
Yes, and these are not mutually exclusive. Many estate plans pair a living trust with a pour-over will. A pour-over will should include testamentary trust provisions as a backstop for assets that were never funded into the living trust.
Does a testamentary trust avoid estate taxes in New York?
Trust type alone does not determine tax treatment. Both living and testamentary trusts can be drafted to address New York’s estate tax, but the tax outcome depends on how the trust is structured, not on whether it is created during life or after death.
How long does probate take in New York before a testamentary trust activates?
It varies. A straightforward, uncontested estate in Surrogate’s Court may take several months to a year, while a contested estate can take well over a year, sometimes two or more. The testamentary trust cannot be funded until the will has been admitted to probate and the fiduciary or trustee has authority to act.
Is a living trust more expensive than a will with a testamentary trust?
A living trust can cost more to draft and fund upfront, while a will with a testamentary trust is cheaper initially but triggers probate fees and court costs after death. Over the full life of the plan, a properly funded living trust may cost less if it avoids probate for major assets. The right answer depends on your estate’s size and complexity.
Can a testamentary trust be used for a special needs beneficiary in New York?
Yes. A properly drafted testamentary supplemental needs trust may be an effective option. It may hold assets for a beneficiary with disabilities while helping preserve eligibility for needs-based government benefits. In this context, Surrogate’s Court oversight can be an advantage, providing supervision over how the funds are managed.
What happens if I forget to fund my living trust in New York?
Any asset left out of the trust may still have to pass through probate. A pour-over will acts as a safety net by directing unfunded assets into the trust after death, but those assets still go through Surrogate’s Court first.
