Many people are uncertain as to whether they should use a will or a revocable (living) trust to accomplish their testamentary objectives. Contrary to popular belief, the issue of which vehicle to use has nothing to do with tax planning; tax efficiency in estate planning can be accomplished through either mode.

The underlying difference between a will and a revocable trust is that a will is effective only upon death and has no legal effect until that time, whereas a revocable trust becomes effective immediately upon its execution and transfer of property into the trust. To give effect to its dispositive provisions, a will must be probated (supervised administration) by a court of law, but unless there is a contest or dispute of its provisions, a revocable trust is a private contract that may be implemented by the named trustee. Thus, a primary purpose for using a revocable trust is the avoidance of probate and its attendant cost, lack of privacy and delayed distribution of assets.

As can be inferred from the foregoing, probate has several potential disadvantages: (1) a will must be filed with the court and thus becomes a matter of public record; (2) its probate requires the appointment of an executor or other personal representative and usually an attorney, each of which is entitled to fees; (3) certain actions of a personal representative may require court approval, possibly necessitating hearings before a judge or commissioner; and (4) because of statutory notice periods and court calendars, disposition of assets can be delayed for six months or even longer.

With a revocable trust, its provisions normally do not become public, and the trustee can take appropriate action as to distribution of assets without court approval or delay. While the trustee may be entitled to fees, these often are waived where a family member or close friend is named as trustee.

A perceived obstacle to a revocable trust for many people is the need to transfer most or many assets previously held in the names of individuals or spouses to the trustee once the trust is created, since without such a transfer, the trust is meaningless. Typically, in the case of a husband and wife setting up a joint revocable trust, their mutual assets are conveyed or assigned to themselves as trustees, to serve until the death of the survivor of them. Only when both are deceased is there a need for a third-party trustee. In the meantime, the trust and its provisions can be amended or revoked at any time prior to the death of the first spouse; after that, certain provisions may become irrevocable and cannot be amended.

The costs of setting up a revocable trust sometimes can be somewhat higher than drawing simple wills, particularly since so-called "pour-over"wills, which leave everything that is not already in the trust to the trustee upon death, still are necessary. However, the eventual cost of probating the wills of both spouses also must be considered in this comparison. In Arizona, the probate process for most estates can be relatively simple if informal probate is requested, but the other advantages of a revocable trust often tend to weigh in favor of the trust solution.