Wills vs. Trusts: How to Choose the Right Tool to Protect the People You Love

When you start considering estate planning, one of the initial questions you might ponder is whether you require a will, a trust, or perhaps both. You may have encountered mixed messages from friends, social media, or television experts, which can make the choice seem overwhelming. While both wills and trusts are significant components of your estate plan, the crucial question is not which document to select, but rather how to formulate a plan that truly functions when your loved ones need it most.

In this article, you will uncover the genuine differences between wills and trusts, how each operates in real life, and what factors you should weigh before reaching a decision. More importantly, you will learn why selecting the appropriate tool is just one aspect of crafting a plan that keeps your family out of court, avoids conflicts, and prevents costly errors.

What a Will Does and What It Doesn’t Do

A will is frequently the first document that comes to mind when people think about estate planning. It enables you to specify who inherits your assets and who you wish to care for your children after your passing. However, a will has significant limitations that many individuals do not recognize until it is too late.

A will must undergo probate, which is a court procedure that becomes part of the public record. Even in states deemed “probate-friendly,” this process can still extend over months or even years, incur substantial costs, and lead to potential disputes. If you have minor children, a will also does not stop them from being temporarily placed in the care of strangers until a judge resolves the situation, unless you have a thorough estate plan established.

It’s important to note that a will does not have any authority while you are still alive. If you become incapacitated, your family will require additional legal tools to handle your medical decisions, financial issues, and personal care. Without a plan that covers incapacity, your loved ones might have to deal with court involvement, delays, and added stress during an already emotional period.

Additionally, while you may have a power of attorney that is effective during your lifetime, it ceases to function upon your death. We understand that this can be perplexing. That’s why we start with clear education to help you grasp what you are doing and why, and then assist you in selecting the right plan (and fee) for your needs.

Due to the limitations of relying solely on wills and powers of attorney, many individuals turn to trusts for enhanced protection and privacy.

Understanding How a Trust Functions

A trust is a legal arrangement that can manage your assets while you are alive and distribute them according to your wishes after your passing. Unlike a will, a well-funded trust avoids probate altogether, keeping your matters confidential and enabling your loved ones to act and manage your affairs right away when something occurs to you.

A trust provides you with significantly greater control. It allows you to safeguard a child’s inheritance from divorce, lawsuits, or poor financial habits, and you can specify how and when they will receive their assets. With the guidance of a knowledgeable attorney and regular plan reviews, a trust can stay in sync with your evolving assets, family dynamics, and long-term desires.

A common misconception is that merely signing a trust means everything is taken care of. Sadly, traditional lawyers and DIY services frequently leave the most crucial step incomplete: funding the trust. If assets are not titled correctly, the trust fails, and your loved ones may still face probate, which is often the very situation the trust was designed to prevent. The true benefit lies in collaborating with a lawyer who guarantees that every asset is accurately transferred, regularly updated, and fully integrated with your overall plan.

So, how do you determine whether you need a will, a trust, or both? It begins with understanding what you want your plan to achieve.

Key Factors to Consider When Deciding Between a Will and a Trust

When selecting the appropriate tools for your plan, the choice is not merely about paperwork. It’s about your objectives, your family, and the legacy you wish to leave behind. Here are some factors to think about:

1. Would you like to keep your loved ones out of court?

If staying out of court, minimizing conflict, and maintaining privacy are priorities for you, establishing a trust might be the ideal choice. Many families assume that probate court will be straightforward, but real-life experiences demonstrate how quickly situations can escalate. From siblings squabbling over cherished belongings to properties being tied up for years, the repercussions of a low-cost or incomplete plan can be severe.

2. Do you have young children?

A will by itself is insufficient to safeguard your children. You require documents that designate long-term and short-term guardians, explicit instructions to prevent your children from being placed in temporary custody by authorities, and paperwork that rules out anyone you would never want to raise your kids. A trust can also secure assets for your children and guarantee that caregivers receive the necessary support.

3. Do you own a house or have multiple accounts?

Even small estates gain from a trust as it streamlines management and stops assets from being overlooked. Currently, unclaimed property in the U.S. surpasses $60 billion, primarily because families were unable to find assets or the owner failed to maintain an updated inventory. A trust-based strategy, along with continuous guidance, helps ensure that your life’s work does not become part of that statistic.

4. Are you looking for someone you can trust to take charge if you become unable to manage things yourself?

A trust can grant immediate authority to a person of your choice, helping you avoid a court-supervised conservatorship. This ensures your bills are paid, your home is taken care of, and your wishes are fulfilled without any court delays.

5. Do you desire long-term protection for your beneficiaries?

If you want your loved ones to inherit assets shielded from creditors, lawsuits, or divorce, a trust provides options that a will simply cannot offer. For those loved ones who may not be financially responsible, are dealing with addiction, or have special needs, a trust guarantees that assets are safeguarded for their benefit.

Regardless of the tool you select, the most important aspect is that your plan functions effectively when your loved ones need it. This goes beyond just having documents; it requires education, support, guidance, and advice. That’s why we always kick off your estate planning with a Life & Legacy Planning Session.

What should you do next?

As a reliable advisor for you and your family, our goal goes beyond merely helping you decide between a will and a trust. We aim to assist you in crafting a thorough estate plan, known as a Life & Legacy Plan, that safeguards your loved ones, keeps them out of legal disputes, and ensures your wishes are fulfilled. Additionally, we have systems in place to periodically review your plan, making sure it functions as intended when your loved ones need it, and that our firm will support them when you cannot.

If you think this might be expensive, we want to reassure you that it is far less costly than losing your assets to unnecessary court fees, conflicts, or your loved ones being left in the dark about your wishes and possessions. Let’s kick things off with a 15-minute discovery call, where we can help you identify the most affordable and effective plan for you and your loved ones.

Schedule a complimentary 15-minute consultation to learn more.

This article is a service of Kristen Wong of Seasons Estate Planning, APC, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Life & Legacy Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session™.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.