Wills vs. Trusts in Minnesota: Which Is Right for Your Estate Plan?

One of the most common questions in estate planning is whether a will alone is sufficient or whether a trust is necessary. The answer depends on the size and complexity of the estate, the individual’s goals for privacy and probate avoidance, and the specific requirements of Minnesota law.

Both wills and trusts are valid estate planning tools, and most comprehensive estate plans include elements of both. Understanding how each works under Minnesota law is essential to making an informed decision.

What Is a Will?

A will (formally called a “last will and testament”) is a legal document that directs how a person’s assets should be distributed after death. In Minnesota, wills are governed by the Uniform Probate Code under Minn. Stat. Ch. 524.

Minnesota Requirements for a Valid Will

Under Minn. Stat. § 524.2-502, a valid Minnesota will must:

• Be in writing — Oral wills are not recognized in Minnesota
• Be signed by the testator — The person making the will must sign it (or direct another person to sign on their behalf in their presence)
• Be signed by at least two witnesses — The witnesses must sign within a reasonable time after witnessing the testator’s signing or the testator’s acknowledgment of the signature

Minnesota does not require a will to be notarized to be valid. However, adding a self-proving affidavit (a notarized statement by the witnesses) can simplify the probate process by eliminating the need to locate witnesses later to verify the will’s authenticity.

Electronic Wills

Since August 2023, Minnesota also recognizes electronic wills under Minn. Stat. § 524.2-520. An electronic will must meet the same substantive requirements as a traditional will but may be signed and witnessed electronically, including through audio-video communication technology. This provides additional flexibility, though working with an attorney familiar with the technical requirements is advisable.

What a Will Can Do

• Name beneficiaries to receive specific assets or shares of the estate
• Appoint a personal representative (executor) to manage the estate
• Name a guardian for minor children
• Direct the payment of debts, taxes, and expenses
• Create testamentary trusts that take effect at death

Limitations of a Will

• Requires probate — A will must be submitted to the court through the probate process before assets can be distributed
• Public record — Once filed with the court, a will becomes part of the public record
• No incapacity planning — A will only takes effect at death and provides no authority for managing affairs during the testator’s lifetime
• Limited control after distribution — Once assets are distributed under a will, the terms of the will no longer apply (unless a testamentary trust is created)

What Is a Trust?

A trust is a legal arrangement in which one person (the trustor or grantor) transfers assets to another person or entity (the trustee) to hold and manage for the benefit of designated beneficiaries. Trusts in Minnesota are governed by Minn. Stat. Ch. 501C (the Minnesota Trust Code).

Revocable Living Trusts

A revocable living trust is the most common type of trust used in estate planning. During the grantor’s lifetime, the grantor typically serves as both trustee and beneficiary, maintaining full control over the trust assets. The trust becomes irrevocable upon the grantor’s death, and the successor trustee distributes assets according to the trust terms.

Key advantages of a revocable living trust include:

• Avoids probate — Assets held in the trust pass directly to beneficiaries without court involvement
• Privacy — Unlike a probated will, trust terms and asset information remain private
• Incapacity planning — If the grantor becomes incapacitated, the successor trustee can step in and manage assets without court intervention
• Flexibility — The grantor can modify or revoke the trust at any time during their lifetime
• Multi-state property — For individuals who own real property in multiple states, a trust can avoid the need for probate in each state (ancillary probate)

For a complete discussion, see the guide to revocable living trusts in Minnesota.

Irrevocable Trusts

An irrevocable trust is one that generally cannot be modified or revoked once established. While this loss of control is a significant drawback, irrevocable trusts offer advantages that revocable trusts do not:

• Estate tax reduction — Assets transferred to an irrevocable trust may be excluded from the grantor’s taxable estate, which is particularly valuable given Minnesota’s $3 million estate tax exemption
• Asset protection — Assets in an irrevocable trust are generally protected from the grantor’s creditors
• Medicaid planning — Certain irrevocable trusts can help protect assets while qualifying for Minnesota Medical Assistance, though the rules are strict and a five-year look-back period applies

For a detailed analysis, see the guide to irrevocable trusts in Minnesota.

Comparing Wills and Trusts: Key Factors

Probate Avoidance

This is often the primary reason individuals choose a trust over a will. Assets governed by a will must pass through probate, which involves court oversight, potential delays, and public disclosure. Assets held in a trust bypass probate entirely.

However, probate avoidance is not always necessary or cost-effective. Minnesota’s probate process is relatively efficient compared to many states, and for simpler estates, the cost of establishing and funding a trust may exceed the cost of probate.

Cost Comparison

A simple will for an individual with modest assets and straightforward distribution goals may cost significantly less to create and administer than a trust. Conversely, for an estate with substantial assets, real property in multiple states, or complex family dynamics, a trust often results in lower total costs when probate fees, attorney fees, and court costs are factored in.

Privacy

Probated wills become public court records, meaning anyone can review the will, the estate inventory, and the distribution of assets. Trust administration is private — the terms of the trust, the identity of beneficiaries, and the value of assets are not part of any public record.

For individuals who value privacy — whether due to the size of their estate, family dynamics, or personal preference — a trust provides meaningful protection that a will cannot.

Incapacity Planning

A will provides no mechanism for managing affairs during the testator’s lifetime. If the testator becomes incapacitated, a court-appointed conservatorship may be required to manage their financial affairs — a costly and public process.

A revocable living trust includes built-in incapacity provisions. If the grantor becomes unable to manage their affairs, the successor trustee steps in automatically, without court involvement. Combined with a durable power of attorney and healthcare directive, a trust-centered plan provides comprehensive protection during incapacity.

Control After Death

Both wills and trusts can direct how assets are distributed after death. However, trusts offer significantly more control over the timing and conditions of distribution:

• Staged distributions — A trust can distribute assets at specific ages (for example, one-third at age 25, one-third at age 30, and the remainder at age 35)
• Incentive provisions — Distributions can be tied to milestones such as completing education or maintaining employment
• Spendthrift protection — Trust assets can be protected from beneficiaries’ creditors
• Special needs planning — A trust can provide for a beneficiary with disabilities without disqualifying them from public benefits

A will can accomplish some of these goals through a testamentary trust (a trust created within the will that takes effect at death), but the will itself must still go through probate before the testamentary trust is established.

When a Will May Be Sufficient

A will-centered estate plan may be appropriate when:

• The estate is relatively modest in value
• Assets are straightforward (bank accounts, a primary residence, personal property)
• There is no real property in other states
• Privacy is not a significant concern
• The intended beneficiaries are competent adults with no special needs
• The individual is comfortable with the probate process
• Other probate-avoidance tools (beneficiary designations, TOD deeds, joint tenancy) cover the majority of assets

Even when a trust is not necessary, every estate plan should include a will as a safety net for any assets that are not covered by other planning tools.

When a Trust Makes More Sense

A trust-centered estate plan is generally recommended when:

• The estate includes real property in multiple states
• The estate’s value approaches or exceeds Minnesota’s $3 million estate tax exemption
• Privacy is important
• There are minor children, beneficiaries with special needs, or beneficiaries who may need protection from creditors
• The individual wants to avoid probate entirely
• Complex family dynamics exist (blended families, estranged family members)
• The individual wants detailed control over when and how assets are distributed
• Business interests are part of the estate

The Best Approach: A Comprehensive Plan

In practice, most thorough estate plans include both a will and one or more trusts, along with supporting documents:

• A revocable living trust as the primary vehicle for asset management and distribution
• A pour-over will that directs any assets not already in the trust to be transferred to the trust at death (these assets still go through probate, but ultimately are distributed according to the trust terms)
• A durable power of attorney for financial management during incapacity
• A healthcare directive for medical decision-making

The specific combination depends on individual circumstances. An experienced Minnesota estate planning attorney can evaluate which tools are necessary and which would add unnecessary cost and complexity.

How to Avoid Probate Without a Trust

It is worth noting that trusts are not the only way to avoid probate in Minnesota. Other tools include:

• Joint tenancy with right of survivorship — Property passes automatically to the surviving co-owner
• Beneficiary designations — Retirement accounts, life insurance, and certain financial accounts pass directly to named beneficiaries
• Transfer on Death Deeds — Real property can be transferred at death without probate using a TODD
• Payable-on-death accounts — Bank accounts with POD designations pass directly to the named beneficiary

For a complete discussion of probate avoidance strategies, see the guide on how to avoid probate in Minnesota.