Estate planning might not be the most exciting topic, but it’s one of the most thoughtful ways to protect your family’s future. Whether you want to ensure your assets are distributed according to your wishes or prevent your loved ones from navigating unnecessary complications, having a clear plan is key.
Two of the most popular tools for estate planning are wills and living trusts. But how do you know which one is the best fit for your needs?
In this post, we’ll break down the differences, key benefits, and considerations to help you decide.
Estate planning might feel overwhelming, but taking the first step doesn’t have to be complicated. To make the process easier, we’ve put together a Free Estate Planning Checklist that walks you through the key steps to get started—so you can feel confident about your future.
________________________________________
What Is a Will?
A will is a legal document that outlines how your belongings should be distributed after you pass away. This can include your home, financial accounts, vehicles, and personal items. Wills also let you designate guardians for minor children, which is an essential step for families with young kids.
However, a will only takes effect after you’ve passed away. Most wills have to go through probate, a court-supervised process that validates the will and oversees the distribution of your assets.
What Is a Living Trust?
A living trust is a legal arrangement where you transfer ownership of your assets into the trust while you’re alive. As the trustee, you maintain control of those assets, but you’ll also name a successor trustee to step in if you become incapacitated or after your passing.
Living trusts help streamline the process by distributing assets from your estate, often skipping probate, which saves time and keeps your financial matters private.
Key Differences Between Wills and Living Trusts
When comparing wills vs. trusts, here are some important distinctions to keep in mind:
When They Take Effect:
- A will is only activated after death.
- A living trust is effective as soon as you create it and transfer assets into it.
The Probate Process:
- Most wills must go through probate, which can be time-consuming and expensive.
- Living trusts can help avoid probate entirely, allowing assets to pass directly to beneficiaries.
Privacy:
- Wills become public record during probate.
- Living trusts remain private, keeping your estate details confidential.
Maintenance:
- Wills should be reviewed periodically, especially after major life events like marriage, divorce, or the birth of a child.
- Living trusts require ongoing updates as you acquire new assets.
________________________________________
Who Should Consider a Living Trust?
A living trust could be the right choice if you:
- Want to avoid the delays and costs of probate.
- Own property in multiple states.
- Value privacy and don’t want your estate details becoming public record.
- Want to plan for possible incapacity.
- Have minor children or dependents with special needs.
- Want control over how and when your assets are distributed (e.g., staggered inheritance payments).
- Are part of a blended family with unique estate planning needs.
________________________________________
Wills vs. Trusts: Which Is Better?
The short answer? It depends on your unique situation.
If your estate is relatively simple and your wishes are straightforward, a will may be all you need.
If you have a larger or more complex estate, own property in multiple states, or want to avoid probate, a living trust could be the better option.
Final Thoughts on Wills vs. Trusts
Estate planning is about more than dividing assets—it’s about protecting your loved ones and ensuring your wishes are honored. By taking action today, you can simplify the future for your family and gain peace of mind knowing everything is in order.
Ready to get organized?
Download our Free Estate Planning Checklist and take the first step toward securing your legacy. It’s a simple guide to help you get started—no legal jargon, just clear, actionable steps.