When it comes to planning your legacy, two of the most common tools are a will and a trust but choosing one depends on your personal goals, financial situation, and family needs. Here’s a breakdown to help you determine which may be right for you.
What Is a Will?
A will is a legal document that directs how your assets will be distributed after your death. It also allows you to name guardians for minor children and an executor to manage your estate.
Pros of a Will:
- Simpler and less expensive to set up
- Allows you to name guardians for children
- Can be updated easily
Cons of a Will:
- May go through probate, which can be time-consuming and public
- Offers limited control over how and when assets are distributed
- Becomes active only after death
What Is a Trust?
A trust, specifically a revocable living trust, is a legal arrangement where you transfer ownership of your assets into the trust during your lifetime. You still control them while you’re alive and specify how they should be managed or distributed after your death.
Pros of a Trust:
- Avoids probate, ensuring faster and private asset transfer
- Can manage assets during incapacity (not just death)
- Greater control over distributions (e.g., to stagger inheritances)
Cons of a Trust:
- More complex and costly to set up
- Requires active funding (re-titling assets into the trust)
- May still need a “pour-over” will for unfunded assets
When to Consider a Will
A will might be appropriate if:
- You have a straightforward estate
- You’re just starting your estate planning journey
- You’re comfortable with the probate process
- Your assets don’t include complex holdings like businesses or out-of-state property
When to Consider a Trust
A trust may be more appropriate if:
- You want to avoid probate for privacy or speed
- You own property in multiple states
- You want to protect beneficiaries from poor spending habits or creditors
- You’re planning for incapacity and want a smooth transition of control
A Combined Approach
In many cases, the best strategy includes both a will and a trust. A trust handles most of the heavy lifting, while a “pour-over will" can ensure any unfunded assets are moved into the trust at death.
In Summary
Your estate plan should reflect your values, family dynamics, and financial priorities. In the creation process, we work together with estate attorneys to help ensure your plan reduces taxes, avoids legal hurdles, and protects your legacy.
If you’re unsure whether a will or trust is best for your situation, we’re here to help you weigh the options and align your estate plan with your overall financial goals. As always, I recommend consulting an estate planning attorney for specifics on estate planning.
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