The main negatives of a trust vs. a will are higher upfront cost, the ongoing chore of keeping assets titled in the trust’s name, annual administrative and tax-filing burdens after your death, brutally compressed income tax brackets, no creditor protection in the revocable form most people use, potential conflicts with Medicaid and SSI eligibility, and the awkward reality that you still need a will anyway. A will, for all its limits, is cheap, simple, and sits quietly until you die. A trust is a living legal entity that needs care, feeding, and sometimes its own tax return.
Higher Upfront Cost
A simple attorney-drafted will runs roughly $300 to $1,000. A revocable living trust typically costs $1,000 to $3,000 for straightforward situations, and estates with business interests, blended families, or multiple properties can push fees to $5,000 or more. The gap exists because a trust has more moving parts: the trust agreement, a schedule of assets, transfer documents for each piece of property, and usually a companion pour-over will. Many attorneys also recommend powers of attorney and healthcare directives alongside the trust, pushing the total higher.
Transferring real estate into the trust means a new deed and recording fees that vary by county. None of that applies to a will, which needs nothing more than proper execution and a safe place to keep it.
Funding the Trust Is a Chore That Never Really Ends
Drafting the trust document is only half the work. For the trust to actually control your assets, each one has to be retitled in the trust’s name. Bank accounts, brokerage accounts, and real estate all need new paperwork. Every time you buy a house, open a new account, or acquire a significant asset, you have to fund it into the trust or it sits outside the trust’s control entirely.
This is where most trusts quietly fail. Any asset still titled in your individual name at death must pass through probate no matter what the trust document says. An unfunded trust delivers the worst of both worlds: you paid for the trust and your family still ends up in court. A will requires no retitling during your lifetime.
Ongoing Administration and Tax Filings
A will sits quietly until you update it or die. A trust, especially after the grantor’s death, carries real administrative work: tracking income, managing distributions, keeping records, and often filing a separate federal income tax return every year.
During your lifetime, a revocable living trust is treated as a grantor trust for tax purposes, meaning you report its income on your personal return and usually file nothing extra.1Internal Revenue Service. Instructions for Form 1041 and Schedules A, B, G, J, and K-1 That changes at death. The trust becomes a separate taxpaying entity, and if it earns any taxable income or has gross income of $600 or more, the trustee must file Form 1041 annually.2Internal Revenue Service. About Form 1041, U.S. Income Tax Return for Estates and Trusts Form 1041 is genuinely complicated, and most trustees hire an accountant, adding several hundred dollars a year in recurring costs.
If you name a corporate or professional trustee, expect annual fees of roughly 1% to 2% of trust assets. On a $500,000 trust, that is $5,000 to $10,000 every year the trust exists. Those fees compound and can meaningfully erode the wealth you intended to pass on. A will has no equivalent ongoing cost; the executor serves once during probate and is done.
Compressed Income Tax Brackets
This is the negative most people never see coming. A trust that retains income rather than distributing it hits the top federal rate at an astonishingly low level. For 2026, a trust reaches the 37% bracket once its taxable income exceeds just $16,000.3Internal Revenue Service. Rev. Proc. 2025-32 An individual does not reach that same 37% rate until income exceeds $640,600.4Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
The full 2026 trust and estate brackets:
- $0 to $3,300: 10%
- $3,300 to $11,700: 24%
- $11,700 to $16,000: 35%
- Over $16,000: 37%
A trust earning $20,000 in investment income pays the same marginal rate as an individual earning more than $640,000. Trustees can reduce the hit by distributing income to beneficiaries, who then pay tax at their presumably lower individual rates. But that means giving up control over the money, which sometimes conflicts with the whole reason the trust exists. If the trust is designed to hold assets long-term for minors or spendthrift beneficiaries, accumulated income gets taxed at these punishing rates with no easy workaround.
No Creditor Protection With a Revocable Trust
Many people assume that putting assets into a trust shields them from lawsuits and creditors. With a revocable living trust, the type most commonly used in estate planning, that assumption is wrong. Because you keep full control and can pull the assets back at any time, courts treat them as still belonging to you. Creditors can seize them to settle debts, and they count as yours in bankruptcy. Under the Uniform Trust Code, which most states have adopted in some form, assets of a revocable trust remain subject to the settlor’s creditors for the settlor’s entire lifetime.
An irrevocable trust can provide creditor protection, but only because you permanently give up control over the assets. That tradeoff is more than most people are willing to make for general estate planning. If creditor protection is your main reason for considering a trust, a revocable living trust will not deliver it.
Irrevocable Trusts Lock You In
Revocable trusts can be rewritten or canceled whenever you want. Irrevocable trusts, by design, cannot. Once assets go in, you generally lose the ability to change the terms, swap beneficiaries, or take the property back. If your family situation shifts — a divorce, a falling out, a beneficiary developing a substance abuse problem — you may be stuck with terms that no longer fit.
Modifying an irrevocable trust typically requires either the consent of all beneficiaries, which rarely happens when their interests conflict, or a court order, which means legal fees and no guarantee of success. A will can be rewritten as often as you want during your lifetime at minimal cost.
Risk to Medicaid and SSI Eligibility
Transferring assets into a trust can jeopardize eligibility for means-tested programs like Medicaid and Supplemental Security Income. Federal law imposes a 60-month look-back period on asset transfers before a Medicaid application. Any transfer for less than fair market value during that window can trigger a penalty period during which you are ineligible for Medicaid-funded long-term care.5Office of the Law Revision Counsel. 42 USC 1396p – Liens, Adjustments and Recoveries, and Transfers of Assets Moving a home or savings into an irrevocable trust inside that five-year window before needing nursing home care is exactly the kind of transfer Medicaid scrutinizes.
The SSI resource limits are tighter still: $2,000 for an individual, $3,000 for a married couple. Assets in a revocable trust count because you still control them. Assets in an irrevocable trust may not count, but the transfer itself can trigger the Medicaid penalties above. A will avoids these problems because it transfers nothing until you die.
Less Oversight of the Trustee
Avoiding probate is the headline benefit of a trust. The flip side is that nobody is watching the trustee. In probate, a court supervises the executor, reviews accountings, and gives interested parties a structured forum to raise objections. A trustee operates largely unsupervised unless a beneficiary affirmatively sues.
When the trustee is honest and competent, this works fine. When they are not, beneficiaries face an uphill fight. They have to hire their own attorney, start litigation, and prove mismanagement without the built-in framework probate provides. The cost of trust litigation frequently exceeds what probate would have cost in the first place. For families where conflict is likely, the lack of automatic oversight is a real risk.
You Still Need a Will
Even with a fully funded trust, you still need a will. A pour-over will acts as a safety net, catching any asset you forgot to retitle in the trust’s name and directing it into the trust after your death. Without one, any asset outside the trust passes under your state’s intestacy laws, the default rules that apply when someone dies without a will, which may send property to people you never intended to benefit.
The catch: assets flowing through a pour-over will go through probate on their way into the trust. If you missed retitling a significant asset, your family gets the delay and expense of probate for that item despite the trust. You have effectively paid for two estate planning documents and still have not fully escaped probate unless you kept the trust perfectly funded throughout your life. A will alone guarantees probate, but at least it avoids this layered complexity.