The most common estate plan in the United States is no plan at all. About 60% of American adults do not have a will, including most people who have stable careers, real estate, and minor children. The default rules of intestate succession then decide who inherits what, and the default rules often produce results the deceased would not have chosen.
You do not need a complicated plan. You need a plan. Here is a plain-English decision tree to pick between the three realistic options most ordinary adults face.
The three options
Option 1: A will. A legal document that says who inherits your property, who is guardian for your minor children if you die before they are 18, and who is in charge of carrying out your wishes (the executor). A will goes through probate, which is the court process for proving the will and distributing the estate. Probate takes time and costs money, but in most states it is straightforward for ordinary estates.
Option 2: A revocable living trust. A legal entity you create during your lifetime and into which you transfer ownership of your significant assets. You are the trustee while you are alive. When you die, the trust property passes to the beneficiaries you named without going through probate. A trust is more elaborate to set up and to maintain (every asset you want covered has to be retitled into the trust), but it sidesteps probate and offers privacy because the trust terms are not filed with a court.
Option 3: Nothing. The state's intestate succession statute decides who inherits. There is no probate avoidance, no guardianship designation, no executor of your choosing. The court appoints an administrator and the statute does the distribution.
When a will is enough
For most ordinary adults, a will is enough. Specifically, a will is the right choice when most of these are true:
- Your estate is modest to moderate. Under one to two million dollars in total assets is a reasonable working number, though it varies by state and by what is in the estate.
- Your assets are concentrated in retirement accounts, life insurance, joint accounts, and a primary residence. Retirement accounts and life insurance pass by beneficiary designation, not through the will or probate. Joint accounts pass by survivorship. The only asset likely to need probate is the house and any individually titled accounts.
- You have minor children and the most important reason for the document is to name a guardian.
- You live in a state with a streamlined probate process. Many states have a small-estate affidavit procedure for estates under a threshold (often $50,000 to $150,000) that avoids full probate.
- You do not have specific concerns about privacy, blended-family complications, or disinheritance.
The cost of a competent will, drafted with the right state-specific witness and notarization formalities, is usually a few hundred dollars through an online service or a few thousand dollars through an attorney. A will combined with up-to-date beneficiary designations on retirement and insurance accounts covers the large majority of ordinary situations.
When a revocable living trust is worth the work
A revocable living trust starts to make sense when one or more of these is true:
- Real estate in multiple states. Each piece of real estate would require its own probate ("ancillary probate") in the state where it sits. A trust avoids the multiple-state probate problem by holding the real estate in the trust itself.
- Privacy matters. Probate filings are public. A trust is not. If you have a high-profile family, a contentious history, or a desire for the inheritance amounts to stay out of the public record, a trust serves that purpose.
- Blended families with delayed distribution. If you want assets to be available to a second spouse for life but to pass to the children of your first marriage on the second spouse's death, a trust can structure that without leaving it to chance.
- Disability of a beneficiary. A special-needs sub-trust inside the larger trust can hold assets for a disabled beneficiary in a way that preserves their eligibility for means-tested public benefits.
- Avoiding probate in a high-cost-probate state. California, Florida, and a few other states have probate processes that can be both slow and expensive on larger estates. A trust avoids that.
A revocable living trust does not save estate taxes by itself. The federal estate-tax exemption is currently high enough that the vast majority of estates do not face it. State estate or inheritance taxes in a few states are a different question and may or may not be addressed by trust structures depending on the state.
Why "nothing" is rarely the right answer
The state's intestate succession statute decides what happens if you die without a will. The rules vary by state but the pattern is similar.
If you are married with no children, the surviving spouse typically inherits everything. If you are married with children from the same marriage, the spouse typically inherits all or most of the estate. If you are married with children from a prior relationship, the spouse and the children typically split, with the proportions varying widely by state. If you are unmarried with children, the children inherit equally. If you are unmarried with no children, your parents, siblings, and increasingly distant relatives inherit in statutory order.
The default rules can produce results most people would not choose.
A long-term partner you never married inherits nothing in most states.
A close friend, a charity, or a stepchild you wanted to remember inherits nothing.
A minor child's share goes into a guardianship or conservatorship that may not be administered the way you would have wanted.
A relative you are estranged from receives an equal share with relatives you are close to.
The administrator the court appoints is whoever the statute names, usually a close relative, and may not be the person you would have picked.
For an adult with any of these patterns, "nothing" is the wrong answer.
Other documents most adults should have
A complete plan usually includes more than the will or the trust.
A durable power of attorney for financial matters, so someone you trust can pay your bills and manage your affairs if you cannot. Covered in detail in our power-of-attorney post.
A healthcare directive (also called a living will or advance directive), so the medical team knows your wishes about end-of-life care.
A healthcare power of attorney, naming an agent who can make medical decisions if you cannot.
A current beneficiary designation on every retirement account and life insurance policy. These pass outside the will. Whatever name is on the beneficiary line is who inherits, regardless of what the will says. Many estates leak through stale beneficiary designations more often than through ambiguous wills.
A list of your accounts and digital credentials, stored somewhere your executor can find but is secure. The list does not have to be a legal document. It has to exist.
A short decision tree
The shortest version of this decision:
If you have a spouse, children, real estate, retirement accounts, life insurance, and a coherent picture of who you want to inherit what, sign a will plus a durable POA plus a healthcare directive. That is the package.
If you have any of the trust-triggering complications (real estate in multiple states, blended family with delayed distribution, special-needs beneficiary, privacy concerns, high-cost-probate state), look at a revocable living trust on top of the will. The trust takes more setup. The peace of mind is worth it for the situations it was built for.
If you have done none of the above, do not let perfect be the enemy of any. A simple will signed today and updated when life changes is better than a complicated plan you keep meaning to start.
What this post is not
Estate-planning law is state-specific and is intertwined with federal tax law. The intestate succession rules summarized here are general patterns, not the specific rule for any state. If your estate has substantial assets, blended-family considerations, business interests, or you live in a state with an estate or inheritance tax, talk to an estate-planning attorney in your state.
LawSensai's Smart Legal Documents includes a will template with state-specific overlays, durable POA templates, and healthcare-directive templates. Documents you generate can be sent to an attorney in the LawSensai Attorney Network for review before signing. Start at lawsens.ai/dashboard/documents.
This post is general information about wills and trusts. It is not legal or tax advice for your situation.