Wills vs. Trusts: Which Is Right for You?
By Katie Clemm, Estate Planning Attorney at Clemm and Associates, LLC
Estate planning is an essential part of protecting your assets, ensuring your loved ones are taken care of, and minimizing legal complications after your passing. For many, the decision between creating a will or a trust can feel overwhelming. Both tools serve important purposes, but they are designed for different goals and circumstances.
At Clemm and Associates, we specialize in helping individuals and families navigate the complexities of estate planning. This guide will break down the key differences between wills and trusts, answer some of the most commonly asked questions, and help you determine which option may be best for your needs.
If you still have questions or want to get started on your personalized estate plan, contact us today for a free consultation.
What Is a Will?
A will, also known as a last will and testament, is a legal document that outlines your wishes regarding the distribution of your property and the care of any minor children upon your death.
Key features of a will include:
Executor Designation: You appoint someone to oversee your estate and ensure your wishes are carried out.
Guardianship for Minors: You can designate a guardian for your minor children.
Simple Asset Distribution: A will specifies who will inherit your belongings, from real estate to sentimental items.
However, a will must go through probate, a court-supervised process that can be time-consuming and costly. Probate also makes your estate details public.
What Is a Trust?
A trust is a legal arrangement in which you transfer ownership of your assets to a trust, managed by a trustee, for the benefit of your beneficiaries. There are many types of trusts, but the most common are revocable living trusts and irrevocable trusts.
Key features of a trust include:
Avoidance of Probate: Assets held in a trust bypass the probate process, saving time and money.
Privacy: Unlike wills, trusts are not public documents, keeping your estate details confidential.
Ongoing Management: Trusts allow for continued management of assets after your death, which can be useful for minor beneficiaries or individuals with special needs.
Tax Benefits: Certain trusts offer strategies to reduce estate taxes or protect assets from creditors.
Wills vs. Trusts: A Side-by-Side Comparison
Commonly Asked Questions About Wills and Trusts
1. Do I need a will if I already have a trust?
Yes! Even if you have a trust, you should still create a pour-over will to ensure any assets not transferred into the trust are distributed according to your wishes.
2. Which is better: a will or a trust?
The answer depends on your goals. A will may suffice for small estates with straightforward wishes. A trust is often better for larger estates, those wanting to avoid probate, or those seeking ongoing asset management.
3. Can a will and a trust work together?
Absolutely. Many people use a combination of both. The will covers any assets not included in the trust, while the trust ensures privacy and avoids probate for major assets.
4. Do wills or trusts help reduce estate taxes?
Wills offer limited tax benefits. Trusts, especially irrevocable ones, can be powerful tools for minimizing estate taxes.
5. How much does it cost to create a will or a trust?
Costs vary depending on complexity. Wills are generally less expensive upfront. Trusts require a larger initial investment but save money in the long run by avoiding probate and offering tax advantages.
6. Who should consider a trust?
Trusts are ideal for individuals with:
Substantial assets or complex estates
Minor children or dependents with special needs
Privacy concerns
A desire to avoid probate
Why You Shouldn’t DIY Your Estate Plan
While there are online tools for creating wills and trusts, estate planning is rarely one-size-fits-all. Mistakes in a DIY estate plan can lead to disputes, increased taxes, or assets being distributed against your wishes.
At Clemm and Associates, we ensure your documents are legally sound, customized to your needs, and optimized for your goals.
When Should You Update Your Estate Plan?
Life changes can significantly impact your estate plan. Be sure to revisit your documents:
After major life events (marriage, divorce, birth, or death)
If your financial situation changes
When moving to a new state
Every 3-5 years for routine updates
Get a Free Consultation at Clemm and Associates
Estate planning is one of the most important steps you can take to protect your legacy and provide peace of mind for your loved ones. Whether you’re considering a will, a trust, or both, the team at Clemm and Associates is here to help.
Contact us today to schedule your free consultation. Let us guide you toward a comprehensive estate plan that meets your unique needs.