A will substitute is a means of passing on property at one's death without going through probate. There are generally five different types of will substitutes, including Life Insurance, Joint Accounts, Joint Tenancy, Revocable (Inter Vivos) Trusts, and Pensions.
Life Insurance is a bit of a euphemism, as it's really the opposite, money paid off on the event of your death. Life insurance is a bit of a gamble, where you are betting that you're going to die before everyone else paying in. If you die soon after you've established your policy, then you've not paid much into it, and you receive maximum benefit. On the other hand, the longer you live, the more you pay in. This is set up as a Contract. It also doesn't have to be a non-probate (will substitute) item. If you bequeath the payout from the life insurance policy to your estate, then it goes into probate.
Joint Accounts are accounts with your name and the name of someone else on it. Think of this like community property. When you die, your name comes off the account and the other person's name stays on. What's yours becomes theirs. There are also payable on death accounts, where there are not two or more names on the account, but you designate who should take on event of your death. Typically, banks will want you to have the new person's name on their documents through a contract, rather than listening to a will.
Pension Accounts only exist if the company for which you work has a pension plan, though you can set up your own through IRA. One thing to note about pension plans is that the beneficiary doesn't change upon divorce. If you get divorced, you need to manually change your beneficiary from your ex-spouse, unless you still want the cheating conniving corpulent corpuscle to get your hard earned pension.
With an inter vivos trust, you set up an account that you pay money and property into that is payable to (whomever) upon your death, or at some predetermined time. You can even name yourself as a beneficiary, if you so choose. You have to select a trustee, who would accept the job of trustee, and then that trustee would become the legal owner of the property - he's holding it in trust for the beneficiary.
Joint Tenancy is similar to Joint accounts, in that there is more than one record owner of a property. When one of the record owners dies, the property is then split among the other records owners.