Choosing Between a Will and a Trust: What You Need to Know

When it comes to estate planning, a common question our workshop participants pose is whether they need a will or a trust. Both documents serve to outline your wishes for the distribution of your assets and the care of your children, but they operate in different ways and offer distinct advantages. LegacyWise helps you understand these differences as you create your own estate documents, making informed decisions that best suit your family’s needs.

What is a Will?

A will is a legal document that becomes effective upon your death. It is a public document that outlines how you want your assets to be distributed and who you want to care for your children.

Here are some key points about wills:

  • Public Record: After you die, your will goes through a court process known as probate. This process is public, meaning anyone can access the details of your will.
  • Probate Process: The probate process can be time-consuming and costly. It can sometimes take months to get results. It involves validating the will, paying off debts, and distributing the remaining assets according to your wishes.
  • Guardianship: A will allows you to name a guardian for your minor children, ensuring they are cared for by someone you trust.

What is a Trust?

A trust is also a legal document. However, unlike a will, it takes effect during your lifetime and continues after your death. It outlines your desires for distributing assets and guardianship for your children, but it offers several advantages over a will:

  • Privacy: Unlike a will, a trust remains private and does not go through the public probate process. This means the details of your estate remain confidential. This may be especially desirable if you do not want the public to know about the size and nature of your assets.
  • Avoiding Probate: In most cases, a trust does not require a court process to distribute your assets, which can save time and money. Your assets can be transferred to your beneficiaries more quickly and with less hassle.
  • Lifetime Management: A trust can be used during your lifetime to protect and manage your assets. This can be particularly useful if you become incapacitated and need a loved one to manage your financial affairs.

Which One Should You Choose?

LegacyWise recommends a combination pourover will plus trust for nearly all users.

Here’s why.

Complexity of Your Estate: If you have a large estate worth millions of dollars, or a complex estate involving multiple pieces of real estate or sizable personal property, a trust will also be beneficial to manage and distribute these assets more efficiently.

  • Privacy Concerns: If you value privacy and want to keep the details of your estate confidential from the public, a trust is the better option.
  • Time: While setting up a trust can be time-consuming initially, it can save your beneficiaries time and money in the long run by avoiding probate court.
  • Control During Lifetime: If you want to manage your assets during your lifetime and ensure they are handled according to your wishes if you become incapacitated, a trust provides this flexibility. For instance, you may sell assets and acquire other ones over the course of your life, so this control allows your trust to adjust accordingly, or you may become ill and require tapping assets to assist with medical bills, and a trust provides you that flexibility as well.

For LegacyWise, unlike most other services, there is no additional cost to include a trust in your estate documents. LegacyWise can help guide you during the estate document selection process. Participate in one of our workshops to choose between a will alone or a pourover will plus trust. Both approaches have their advantages and can be tailored to meet your specific needs. By making an informed choice, you can ensure that your assets are distributed according to your wishes and that your loved ones are cared for in the way you intend.

Visit legacywise.org/start/ to register for a workshop near you.