When it comes to planning for the future, two of the most common legal tools people hear about are wills and trusts. Both serve essential roles in making sure your property and wishes are honored, but they operate in very different ways.
Understanding the differences can help you decide which option best fits your circumstances and goals.
What a Will Does
A will is a legal document that outlines how you want your assets to be distributed after your death. It also allows you to name guardians for minor children and an executor to carry out your wishes. Wills are straightforward and affordable to create, making them a popular choice for individuals seeking a simple estate plan.
One downside is that wills must go through probate, a court process that can be time-consuming and costly. During probate, your estate becomes a public record, which may not appeal to those who prefer privacy. Still, for many families with modest estates, a will is sufficient, ensuring that clear instructions are left behind.
See How to Write a Legally Valid Will Without Breaking the Bank for a step-by-step guide.
What a Trust Does
A trust, by contrast, is a legal arrangement where you transfer ownership of your assets into the trust during your lifetime. You can act as the trustee and continue managing everything while you’re alive, and then name a successor trustee to take over when you pass away.
The primary advantage of a trust is that it avoids the probate process. Your assets pass directly to your beneficiaries without the need for court involvement, often saving time, money, and stress. Trusts also offer more privacy than wills since they generally don’t become part of the public record. They can be beneficial for larger estates, blended families, or situations where you want more control over how and when beneficiaries receive assets.
The tradeoff is that trusts are more complex and expensive to set up. They require ongoing management to make sure assets are properly transferred into the trust.
Can You Change a Will or Trust Later?
Both wills and trusts can usually be updated, but the process differs. A will can be changed by drafting a new one or adding a codicil, which is an amendment that updates specific parts without rewriting the entire document. This flexibility allows for easy adjustments as your life circumstances change.
Trusts can also be revised, but only if they are revocable. With a revocable living trust, you can add or remove assets, change beneficiaries, or even dissolve it entirely while you’re alive. An irrevocable trust, on the other hand, is generally locked once created, which is why it’s often used for tax or asset protection purposes.
Read Estate Planning for Blended Families for insights on how to manage trusts and wills.
Which Should You Choose?
Choosing between a will and a trust depends on your needs. If you have a straightforward estate, few assets, or want a cost-effective plan, a will might be enough. On the other hand, if you want to avoid probate, ensure privacy, or control distributions over time—such as for young children or heirs who need financial guidance—a trust may be the better option.
Many people actually use both. A will can cover personal wishes and name guardians for children, while a trust handles the bulk of financial assets. Consulting with an estate planning attorney can help you decide which approach offers the best protection for your situation.
For related steps in safeguarding your healthcare, check out When to Consider a Living Will or Advance Directive.
