{"id":12243,"date":"2021-06-10T09:00:33","date_gmt":"2021-06-10T14:00:33","guid":{"rendered":"https:\/\/legaltalktexas.hammerle.com\/?p=12243"},"modified":"2025-06-18T16:59:39","modified_gmt":"2025-06-18T21:59:39","slug":"difference-between-a-living-trust-and-an-estate-plan","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/estate-planning\/difference-between-a-living-trust-and-an-estate-plan\/","title":{"rendered":"What is the Difference Between a Living Trust and an Estate Plan?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">In the realm of <\/span><a href=\"https:\/\/hammerle.com\/practice-areas\/estate-planning-probate\/\"><span style=\"font-weight: 400;\">estate planning<\/span><\/a><span style=\"font-weight: 400;\">, there can be a lot of confusion around terminology. Often people come into our offices asking for or about one type of legal document or another, and either they do not understand what they are asking for, or they don\u2019t understand the interplay among various legal documents. In this article, we will address two terms which some people use interchangeably, but which are very different things: living trusts and estate plans.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is a Living Trust?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Living trusts, which are also sometimes called \u201c<\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/elder-law\/revocable-living-trusts\/\"><span style=\"font-weight: 400;\">revocable living trusts<\/span><\/a><span style=\"font-weight: 400;\">\u201d or \u201cinter-vivos trusts,\u201d are estate planning documents prepared and implemented <\/span><i><span style=\"font-weight: 400;\">during a person\u2019s lifetime<\/span><\/i><span style=\"font-weight: 400;\"> and which also include a disposition plan for those <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/wills-trusts-estate-planning\/funding-of-revocable-living-trusts\/\"><span style=\"font-weight: 400;\">assets owned in the trust<\/span><\/a><span style=\"font-weight: 400;\">. This is in contrast to a Will, which only has effect after a person has passed away. Typically, the \u201cgrantor\u201d (the person who creates the trust) is also the \u201cbeneficiary\u201d (the person who benefits from the trust) and the initial \u201ctrustee\u201d (the person running the trust and managing trust assets). Because a living trust has provisions for the management of assets by successor trustees, it is a good tool to plan for possible incapacity (for example, dementia, Alzheimer\u2019s or injury) of the grantor\/beneficiary, and a good way to avoid any guardianship proceeding if the beneficiary becomes wasteful with his or her assets. It\u2019s also helpful if the beneficiary has no other family members to care for him in his older age, as a bank trust department can serve as trustee and manage all assets and distributions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are other reasons people may prefer living trusts to wills. Living trusts are generally preferred to include complicated plans for disposition of assets, such as continued trusts for family members, especially in blended family situations. They are also harder to contest than a will, if there is a threat of the disposition being challenged. Living trusts provide more privacy than wills, as wills become public record as part of the probate process and living trusts do not.\u00a0 Finally, living trusts can help avoid probate all together, which is especially helpful if someone owns property in a state outside of Texas.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is an Estate Plan?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">An <\/span><a href=\"https:\/\/hammerle.com\/practice-areas\/estate-planning-probate\/estate-planning\/\"><span style=\"font-weight: 400;\">estate plan<\/span><\/a><span style=\"font-weight: 400;\">, however, is bigger than a living trust. Estate planning encompasses an analysis of your assets and how each one will pass, whether by living trust, will, or <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/family-law\/marriage\/4-common-mistakes-beneficiary-designations\/\"><span style=\"font-weight: 400;\">beneficiary designation<\/span><\/a><span style=\"font-weight: 400;\">. Estate planning can address <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/estate-planning-and-probate\/the-imperiled-federal-estate-tax-exemption\/\"><span style=\"font-weight: 400;\">estate tax<\/span><\/a><span style=\"font-weight: 400;\"> issues, and the proper documentation of <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/estate-planning-and-probate\/estate-planning-lessons-learned-from-coronavirus\/\"><span style=\"font-weight: 400;\">small business interests<\/span><\/a><span style=\"font-weight: 400;\">. It generally includes incapacity planning during a person\u2019s lifetime by the preparation of financial and medical powers of attorney, HIPAA releases, choices of possible guardians (for minor children or for incapacitated adults), and living wills which set forth a person\u2019s wishes regarding the use of life support. In other words, estate planning is a process which ends in an intended course of action for the passage of assets and the preparation of documents that will facilitate that plan. A living trust can be a <\/span><i><span style=\"font-weight: 400;\">part<\/span><\/i><span style=\"font-weight: 400;\"> of the estate plan, but living trusts are not a part of every plan, and they certainly are not the only part of the estate plan.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a final point of clarity, use of the term \u201cestate\u201d is also often confused. Your \u201cestate\u201d is what you own at your death. It consists of all assets that need to be passed on to a beneficiary.\u00a0 Those assets that are owned in a revocable living trust make up the \u201ctrust estate,\u201d for which the trustee has the responsibility of distributing. Assets owned outside of a revocable living trust are further divided into your \u201cnon-probate estate\u201d and \u201cprobate estate.\u201d Your \u201cnon-probate estate\u201d consists of assets which have payable-on-death designations or beneficiary designations, and through which, pass to beneficiaries according to their contractual terms and not according to the terms of your Will.\u00a0 (As a technicality, any trust estate is also considered part of the non-probate estate.) Your \u201c<\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/estate-planning-and-probate\/probate-and-its-process-explained\/\"><span style=\"font-weight: 400;\">probate estate<\/span><\/a><span style=\"font-weight: 400;\">\u201d consists of assets for which the executor under your Will has the responsibility to distribute, or if you die without a Will, an administrator appointed by the court has the responsibility to distribute. Determining each part of your estate is another facet of estate planning.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Hammerle Morris Can Help with All of Your Estate Planning Needs<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Like numerous things in life, your estate \u201cis a many and varied thing.\u201d Planning it takes deliberation and aforethought. Lack of planning simply kicks the can down the road to family and friends to figure out after a loved one\u2019s death, and generally causes additional expenses and delay. It can also leave you without valuable protection during your lifetime, if something happens leaving you incapacitated. If you haven\u2019t considered it, do so today.\u00a0 Attorneys <\/span><a href=\"https:\/\/hammerle.com\/lawyers\/virginia-hammerle\/\"><span style=\"font-weight: 400;\">Virginia Hammerle<\/span><\/a><span style=\"font-weight: 400;\">,\u00a0 <\/span><a href=\"https:\/\/hammerle.com\/lawyers\/kendra-rey\/\"><span style=\"font-weight: 400;\">Kendra Rey<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/hammerle.com\/lawyers\/robert-morris\/\"><span style=\"font-weight: 400;\">Robert Morris<\/span><\/a><span style=\"font-weight: 400;\"> at Hammerle Morris Law Firm would love to speak with you and help you put your plan in motion. <\/span><a href=\"https:\/\/hammerle.com\/lewisville-attorney\/#form\"><span style=\"font-weight: 400;\">Schedule a consultation<\/span><\/a><span style=\"font-weight: 400;\"> today.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In the realm of estate planning, there can be a lot of confusion around terminology. Often people come into our offices asking for or about one type of legal document or another, and either they do not understand what they are asking for, or they don\u2019t understand the interplay among various legal documents. In this [&hellip;]<\/p>\n","protected":false},"author":38,"featured_media":12244,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1224,42],"tags":[685,905,82],"class_list":{"0":"post-12243","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-estate-planning","8":"category-wills-trusts","9":"tag-estate-planning","10":"tag-trusts","11":"tag-wills"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is the Difference Between a Living Trust and an Estate Plan? - Hammerle Morris Law Firm<\/title>\n<meta name=\"description\" content=\"In estate planning, there is often confusion around terminology. 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