Most adults in NSW need at least a will. Some need more. Here’s how to tell the difference, and why it matters.

Key Takeaways

A will sets out what happens to your assets after you die. Without one, the law decides for you.
A trust is a legal structure that holds assets on behalf of others. It can operate during your lifetime or take effect after death.
Trusts offer greater control, privacy, and asset protection than a will alone, but they come with ongoing obligations.
Many people benefit from having both: a will to cover everything not held in a trust, and a trust for specific assets or circumstances.
The right structure depends on your family situation, assets, and long-term intentions. Legal advice specific to your circumstances is essential.

If you have never got around to making a will, you are not alone. Research consistently shows that a large proportion of Australian adults do not have one. But fewer people still have thought about whether a will is enough for their situation, or whether a trust might do a better job of protecting what they have built.

The two are often mentioned in the same breath, which causes confusion. A will and a trust are not the same thing, they do not serve identical purposes, and in some situations you need both. This article explains what each one does, where they differ, and how to work out which applies to you.

This is not a topic reserved for the wealthy or the elderly. Anyone with assets, dependants, or a clear sense of what should happen when they die has reason to think carefully about both.

What a will actually does

A will is a legal document that records your instructions for what should happen to your assets when you die. It names an executor (the person responsible for carrying out your wishes), identifies your beneficiaries, and may include specific bequests, such as leaving a particular item or sum to a particular person.

Without a valid will, you die intestate. This means the laws of New South Wales determine how your estate is distributed, according to a fixed formula that may not reflect your intentions at all. A spouse and children are generally prioritised, but the outcome in complex family situations, such as blended families or estranged relatives, can be far from what you would have chosen.

A will only takes effect after you die, and it only covers assets that are in your name. Assets held jointly with another person, assets held inside a company or trust, and superannuation are generally not covered by your will. This is a point that catches many people out.

A will is also a public document once it goes through probate, the legal process by which a court validates it and authorises your executor to act. Anyone can, in principle, access a probated will.

What a trust actually does

A trust is a legal arrangement in which one party (the trustee) holds assets on behalf of another (the beneficiary). The trust itself is not a person, but it is a recognised legal structure that can own property, hold investments, and distribute income.

Trusts can be created during your lifetime or take effect upon your death through your will (a testamentary trust). The distinction matters because they serve different purposes and have different tax and administrative implications.

Common types of trusts used in estate planning include:

Testamentary trusts, which are created by a will and come into effect when you die. Assets flow from your estate into the trust, which then distributes them to beneficiaries according to your instructions.
Discretionary family trusts, which are created during your lifetime and give the trustee flexibility to distribute income and capital among a range of beneficiaries depending on circumstances. These are commonly used in business and investment structures.
Special disability trusts, which allow you to set aside funds for a family member with a disability without affecting their eligibility for government support.

Trusts do not go through probate. Assets held in a trust pass to beneficiaries without becoming part of your estate, which means they are not subject to estate challenges in the same way a will can be, and they remain private.

The key differences

A will and a trust are not alternatives, they are different tools with different functions. The clearest distinctions are:

When they operate. A will only takes effect after you die. A trust operates from the moment it is established.
What assets they cover. A will covers assets held in your name. A trust only covers assets that have been transferred into it.
Privacy. Wills become public through probate. Trusts remain private.
Control over distribution. A will distributes assets outright to beneficiaries. A trust can hold assets for years, distribute income at set intervals, or make distributions conditional on certain events.
Contestability. Wills can be contested by eligible persons under the Succession Act 2006 (NSW). Testamentary trusts can offer greater protection in this regard, though they are not immune from challenge.
Complexity and cost. A will is simpler and less expensive to set up. A trust involves ongoing administration, annual tax returns, and trustee obligations.

Who should consider a will alone?

A well-drafted will covers the needs of most adults. It tends to be the right approach if you:

Are single, or in a straightforward relationship without children from a previous relationship
Have assets held in your own name and have no business or investment structures
Do not have a beneficiary with a disability, addiction issue, or vulnerability that might make a direct inheritance unsuitable
Have a modest to moderate estate with no significant complexity

Even in these circumstances, a will needs to be carefully drafted. Generic online templates rarely account for the specific rules that apply in New South Wales, and a poorly worded will can create exactly the kind of confusion and dispute it was meant to prevent.

Who should consider a testamentary trust?

A testamentary trust is worth serious consideration if any of the following apply to your situation:

You have young children and want assets managed on their behalf until they reach a certain age, rather than distributed outright at 18.
You have a beneficiary with a disability, mental health issue, or addiction, and you want to ensure ongoing support without giving them direct control of a lump sum.
You are in a blended family and want to provide for a current spouse while ensuring that assets ultimately pass to your children from a previous relationship.
You are concerned about a beneficiary’s marriage or relationship and want some protection against a future family law claim on inherited assets.
You have a significant estate and want to provide income-splitting opportunities that can reduce your beneficiaries’ overall tax liability.

Testamentary trusts do not replace a will. They are created within your will and only operate after your death. You still need a will regardless.

Who should consider a trust?

A discretionary family trust set up during your lifetime is primarily a tool for managing assets and income across a family group. It is less commonly used for straightforward personal estate planning and more often relevant if you:

Run a business through a trust structure and need to consider what happens to the trust and its assets when you die
Own investment properties and want to manage income distribution in a tax-effective way, there are potential land tax and other consequences for holding property this way
Have significant assets and want to begin estate planning in a way that operates independently of probate

If you already have a family trust, your estate planning needs to account for what happens to the trust when you die: who becomes the trustee, who controls the appointment of trustees, and whether the trust deed allows your wishes to be carried out. These questions require careful legal review.

What about superannuation?

Superannuation sits outside your estate entirely. When you die, your superannuation fund will not automatically follow the instructions in your will. Instead, the fund trustee distributes your super according to a combination of your binding death benefit nomination (if you have one) and the fund’s own rules.

A binding death benefit nomination directs your super to specific dependants or to your estate. Without one, the fund trustee has discretion over who receives your superannuation, and the outcome may not align with your intentions.

You should ensure that your superannuation nominations are reviewed at the same time as your will and, where relevant, your trust arrangements. They work as a package, and a gap in any one of them can undermine the whole.

Working with & Legal

& Legal works with individuals and families across New South Wales on wills, testamentary trusts, and estate planning. Our solicitors handle straightforward wills and more involved arrangements, including blended family situations, business asset planning, and long-term provision for beneficiaries who need ongoing care.

We take time to understand your circumstances before recommending anything. If a will is all you need, we will tell you. If your situation is more complex, we will explain your options in plain language. To speak with one of our team, contact us here.

Frequently asked questions

Do I still need a will if I have a trust?

Yes. A trust only covers assets that have been transferred into it. A will covers everything else held in your own name. Most people with a trust structure still need a will to capture assets that fall outside the trust, and to appoint a guardian for any minor children.

Can someone challenge a testamentary trust?

Eligible persons can make a family provision claim against your estate under the Succession Act 2006 (NSW). A testamentary trust does not eliminate this risk, though the way assets are structured within the trust can affect the outcome. Legal advice specific to your circumstances is important before assuming a trust provides full protection.

How often should I review my will and trust arrangements?

You should review your estate planning documents whenever something material changes: marriage, separation or divorce, the birth or adoption of a child, the death of a beneficiary or executor, or a major change in the assets you hold. As a general guide, every three to five years is reasonable even without a specific trigger.

What happens if I die without a will in NSW?

If you die intestate, the Succession Act 2006 (NSW) determines how your estate is distributed. The rules prioritise a surviving spouse and children, but the outcome in blended families, de facto relationships, or situations involving estranged family members can be highly unpredictable. The distribution may bear no resemblance to what you would have chosen.

Is a testamentary trust more expensive than a standard will?

A will that includes a testamentary trust structure is more complex than a basic will, and the legal costs reflect that. However, the costs involved in setting up a testamentary trust are typically far lower than the cost of a dispute, a poorly structured estate, or the tax inefficiency of distributing assets directly. For many families, the investment is well justified.

This article is general information only. It does not constitute legal advice and should not be relied upon as such. Estate planning involves complex legal and tax considerations that vary depending on individual circumstances. For advice specific to your situation, please contact & Legal directly.

Wills vs trusts: what’s the difference (and who needs what)?