Difference Between Will & Trust

In terms of what you have to do:

Will:

  1. Write a will.
  2. SIGN and DATE in the presence of TWO witnesses, who also must sign.
  3. Store securely and let trusted people know where it is.

Pro: One-time setup — simple, quick, “fire and forget.”

Con: Assets still go through probate, which means delays and costs. How much? Here.

Trust:

  1. Draft a trust document — ideally with an attorney’s guidance.
  2. Sign the trust document before a notary public (many banks offer free notary).
  3. Fund the trust, this is the step where most trust defects occur. Simply listing an asset in the trust document is NOT sufficient — you must formally transfer ownership to the trust.
  4. Maintain and manage the trust over time.

Pro: assets in trust bypass probate process.

Con: Requires more setup and ongoing effort.

Scenario

Question: I have asset of 10 million, 90% of them (9 million) is in a trust and FUNDED, I have a will that covers 50% of the 1 million not covered by the trust, does the probate court charge me based on 500K, 1 million, or 10 million?

Short answer: 1 million.

Long answer: In California, probate fees are calculated based solely on the assets that actually pass through probate—not on assets held in a trust or assets with designated beneficiaries (e.g., joint tenancy, POD/TOD accounts, or life insurance).

  1. Trust Assets ($9M): No probate fees.
  2. Will Assets ($500K): Probate applies unless another avoidance method (e.g., joint tenancy) is used.
  3. Remaining $500K: If no beneficiary is named, it goes through probate (adding another $500K to the probate estate).
  4. Statutory Fee for $1M: $46,000.

There are tools/methods/techniques that will reduce probate fee further, but it will require you to make dedicated arrangement. Merely writing those assets in a will does not bypass probate process.

Why do assets in trust avoid probate court?

A trust avoids probate because it is a separate legal entity that holds and manages assets outside of your individual name (and thus outside of court-supervised probate).

Assets are owned by the trust. When you fund a trust, you transfer ownership of assets (e.g., real estate, bank accounts) from your personal name to the trust’s name (e.g., “The Smith Family Trust”).

Since these assets are no longer in your individual name, they don’t go through probate.