Will vs. Trust: Which One Do You Need?
Do you need a will, a trust, or both? Learn how each works, what goes through probate, and how the right plan makes things easier for your family.
Do you remember those scenes from classic period dramas? A lawyer gathers the family in a mahogany-paneled study to read the will of a recently deceased relative. The room is tense as each person waits to hear what they have inherited.
These dramas make for great entertainment, but they also leave us with a misleading idea about what happens after we die. Not only do they imply that wills are for wealthy families, but they also suggest that once a will is in place, everything you own simply passes to the people you named.
Do you need a will, a trust, or both? Getting that decision right now could be the difference between your family receiving what you intended within weeks or waiting, in some cases, years while the courts work through your estate.
What is a will, and what can it actually do for you?
Think of a will as your last written testament. It tells the probate court who should receive the property it covers and names the person you trust to carry out your wishes, known as the executor.
Do you already have a will in place? If you do, have you chosen an executor who knows where your documents are, understands what you own and is prepared to take responsibility during that vulnerable time for your family?
Naming an executor matters, but it does not give them immediate control of your estate. The will must usually be filed with the probate court, and the executor must be formally appointed before they have legal authority to act.
You may have named an executor years ago, but is that person still willing and able to serve? If you leave the role open, or the person you chose can no longer take it on, your will does not become invalid. Instead, the court will appoint someone to manage the estate, and that person may not be the one you would have trusted with the responsibility.
Even with a perfectly valid will, the court must first appoint the executor. Once appointed, the executor gathers the property in the probate estate, settles valid debts, taxes and expenses, and distributes what remains to your beneficiaries according to the will.
Depending on how complex your estate is, probate can take several months and, in some cases, a few years. During that time, court costs, attorney fees and executor compensation are generally paid from the estate, leaving less for the people you intended to provide for.
What happens if you die without a will in place? State law decides who inherits your probate assets and the court appoints someone to manage the estate.
Having a will does not automatically keep your family out of probate. Any property that is not held in a trust or arranged to pass directly to someone may still have to go through the court process, whether you have a will or not.
How can you reduce the amount of your estate that ends up in probate? For many of our clients, the answer is a properly funded trust.
What is the purpose of a trust?
A trust lets you decide who will manage the assets placed into it, how they should be handled and who will benefit from them. You create the trust, the trustee follows your directions, and the beneficiaries receive what you intended during your lifetime, after your death or both.
The important thing is to make sure the right assets have been properly transferred into your trust. When they have, those assets can generally pass outside probate.
A properly funded trust can spare your family from waiting for the probate court to move things forward on their timetable. It can also keep more of your affairs out of the public record. Your named successor trustee can step in, manage the trust property and distribute it according to your instructions without first waiting for a court appointment.
But what if you signed the trust and never transferred your accounts or property into it? This is what is known as an unfunded trust. The paperwork exists, but the trust cannot control assets that were never placed inside it. Unless you ensure those assets are arranged to pass another way, they may still end up in probate.
Funding your trust is what allows it to work for your family as you intended.
This all sounds complicated and many people avoid setting a trust up for this reason. But a trust isn’t always complex. For straightforward estates, there are reputable attorney-designed platforms that can walk you through the basics in a matter of hours. That said, if you own real estate in more than one state, have a business, or have a more multifaceted family situation, it's worth having a conversation with an attorney.
So, do you need a will or a trust?
If a trust is right for your family, your estate plan will usually still include a pour-over will. A pour-over will acts as a backup that catches anything you forgot to title in the trust. It also lets you name a guardian for your minor children, which a trust cannot do on its own.
It is common to keep both documents together. The trust can move properly titled assets privately and with less court involvement. The will records the decisions the trust cannot make, including who should care for your minor children and who you trust to carry out your final wishes.
If you already have a will or trust, take it out and compare it with what you own today. Check the deed to your home, the names on your accounts and the beneficiaries on your insurance and retirement plans.
Would your plan work for your family if they had to rely on it tomorrow? If you are not sure, we can help you understand what is already in place, what may be missing and what needs attention before your family is left to work it out without you.
Feel free to book a consultation with us by clicking this link.
This article is for general educational purposes and is not personalized legal, tax or financial advice. Estate-planning laws and procedures vary by state. Work with a qualified estate-planning attorney in your jurisdiction when preparing or reviewing legal documents.
