When planning your estate, one of the most important decisions is choosing between a will and a trust—or using both. While both tools serve to distribute your assets after death, they differ significantly in terms of cost, complexity, privacy, and the ability to avoid probate. Below, we compare their advantages and highlight situations where a living trust might be the key to protecting your family.
What Is a Will?
A will is a legal document that specifies how your assets should be distributed after you pass away. It can also name guardians for minor children and provide instructions for final arrangements. However, wills must go through probate—a court-supervised process that validates the document and oversees asset distribution. Probate can be time-consuming, costly, and public.
Advantages of Wills:
- Simpler and less expensive to create than trusts.
- Essential for naming guardians for minor children.
- Provides clear instructions for asset distribution.
Disadvantages:
- Subject to probate, which can delay inheritance and expose estate details to public scrutiny.
- Offers limited control over how beneficiaries receive assets.
What Is a Trust?
A trust is a legal arrangement where assets are transferred into the ownership of the trust and managed by a trustee for the benefit of designated beneficiaries. A revocable living trust is particularly popular because it allows you to retain control over the assets during your lifetime while avoiding probate after death.
Advantages of Trusts:
- Avoids probate, allowing assets to transfer directly to beneficiaries without delays or court costs.
- Maintains privacy since it does not become part of public records.
- Provides greater control over how and when beneficiaries receive their inheritance (e.g., staggered distributions for minors or young adults).
- Can manage assets during periods of incapacity through a successor trustee.
Disadvantages:
- More complex and expensive to set up than wills.
- Requires funding—assets must be retitled in the name of the trust.
When Is a Living Trust Key?
A living trust may be essential in certain scenarios:
- Avoiding Probate: If you own property in multiple states or want to bypass lengthy court processes, a living trust ensures seamless asset transfers without probate complications.
- Protecting Privacy: For families with high-value estates or sensitive inheritance plans (e.g., disinheriting someone), trusts keep details confidential.
- Providing for Minors or Special Needs Beneficiaries: Trusts allow you to set specific conditions for when and how minors or vulnerable individuals receive their inheritance, ensuring long-term financial security.
- Managing Blended Families: Trusts help clarify inheritance lines in cases involving children from previous marriages, reducing conflicts.
- Incapacity Planning: A living trust allows a successor trustee to manage your assets if you become incapacitated, avoiding the need for court-appointed guardianship.
Conclusion
Choosing between a will and a trust depends on your family’s needs, the complexity of your estate, and your desire for privacy or control. In many cases, combining both tools provides comprehensive protection—using a will for guardianship designations and non-trust assets while relying on a trust to avoid probate and safeguard privacy.
If you’re unsure which option is best for your circumstances, The Law Office of Natalie Aguilar Glatz can help. Our experienced team specializes in crafting tailored estate plans that protect your family’s future while respecting your wishes. Contact us today for expert guidance!