Choosing the Right Estate Planning Tool
Estate planning is more than just writing a will—it’s about safeguarding your legacy and making sure your loved ones are taken care of. One of the most common questions in estate planning is: "What’s the difference between a will and a living trust?" Or more specifically, "Which is better for me—a living trust vs will?"
According to a 2024 survey by Caring.com, only 32% of Americans have a will or other estate planning document in place. Many delay the process due to confusion over the options. But understanding the difference between will and trust tools can simplify the process and empower better decisions.
In this guide, we’ll break down the pros and cons of each, provide real-world use cases, and help you choose the right estate planning strategy for your situation.
What Is a Will?
A will, also known as a last will and testament, is a legal document that outlines how your assets should be distributed after death. It also designates guardians for minor children and names an executor to manage your estate.
Key Features of a Will:
- Becomes effective only after death
- Must go through probate (court-supervised distribution)
- Can name guardians for children
- Can be contested in court
- Relatively simple and cost-effective
What Is a Living Trust?
A living trust, or revocable trust, is a legal entity you create during your lifetime. You transfer ownership of your assets into the trust, and it holds them on your behalf.
Key Features of a Living Trust:
- Becomes effective immediately upon creation
- Avoids probate entirely
- Offers privacy (not a public record like a will)
- Can manage assets if you become incapacitated
- Typically more expensive to set up and maintain
Unlike a will, a trust allows for more seamless transitions of asset control without the delays of probate.
Living Trust vs Will: Key Differences
|
Feature |
Will |
Living Trust |
|
Effective When |
After death |
Immediately |
|
Probate Required |
Yes |
No |
|
Public Record |
Yes |
No |
|
Incapacity Planning |
Limited |
Yes |
|
Complexity and Cost |
Low |
Higher |
|
Guardian for Minors |
Yes |
No (must be done via will) |
Quick Tip:
If you have minor children, you’ll still need a will—even if you create a living trust—to appoint a guardian.
When to Choose a Will
A will may be the better option if:
- You have a smaller estate
- You want a low-cost option
- You don’t mind the probate process
- You’re mainly concerned with naming guardians for minor children
Estimated Cost: According to LegalZoom, a basic will can cost $300 to $1,000 when drafted by an attorney.
When to Choose a Living Trust
Consider a living trust if:
- You have a larger or more complex estate
- You want to avoid probate delays and costs
- You value privacy
- You want to plan for possible incapacity
- You own property in multiple states
Estimated Cost: Trust preparation typically ranges from $1,500 to $5,000+ depending on complexity and location.
Expert Insight: According to the IRS and the National Association of Insurance Commissioners (NAIC), trusts are often more effective at reducing estate tax exposure, especially when paired with other strategies like gifting or insurance trusts.
Common Misconceptions About Wills and Trusts
"I don’t have enough assets for a trust."
Even modest estates can benefit from trusts due to probate avoidance and easier management during incapacity.
"A will avoids probate."
Wills go through probate unless specific steps are taken with jointly owned property or beneficiary designations.
"Trusts are only for the wealthy."
Living trusts are useful for a wide range of income levels, especially for those with real estate or dependents.
What Estate Planning Services Should Include
Whether you choose a will or a trust, comprehensive estate planning services should cover:
- Wills and trusts
- Powers of attorney (financial and healthcare)
- Living will or advance healthcare directive
- HIPAA authorization forms
- Beneficiary designations review
- Digital asset planning
How an Estate Planning Attorney Can Help
An experienced estate planning attorney will:
- Tailor documents to your state laws
- Offer advice on reducing estate taxes
- Help manage complex family or business dynamics
- Ensure proper funding of trusts
Look for attorneys who are members of the American College of Trust and Estate Counsel (ACTEC) or your state’s estate planning council.
Choosing Between a Will and a Trust
The decision between a living trust vs will depends on your personal circumstances, goals, and comfort with complexity. Many people benefit from both—a living trust to manage assets and a will to name guardians and cover remaining items.
Start by evaluating your estate size, your privacy concerns, and whether you want to avoid probate.
Take the next step: Schedule a free consultation with the BetterWealth team to build a plan that fits your legacy.
