Do I need a will, a trust or both? It’s one of the most common questions we hear, and the answer is rarely simple. It depends on your family, your assets, your priorities and how much work you’re willing to do now to make things easier for the people you leave behind.
Here’s how we typically walk clients through the decision.
The core difference
A will is an ancient tool, which traces back to English common law and the Middle Ages. In many ways, it still operates on a system that’s hundreds of years old.
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When you die with a will as your primary estate planning vehicle, your estate goes through probate, which is a court-supervised process of settling what you owned. In most places, probate is slow, expensive and public.
Some states are less slow, less expensive or less public, but in general, probate is a complex and costly legal process.
A trust does much of the same work as a will, but it’s a far more modern structure. A revocable living trust functions as a will-replacement vehicle. It helps you arrive at the same destination — your assets go to the people you choose. However, while a will typically goes through the probate court process, a trust can bypass it.
Some people need both
If your plan is built around a revocable trust, you still need a will. It will just play a different role. This fact tends to surprise a lot of people.
Think of it this way. A “will-only” plan uses the will to say who gets what and when. But once you have a revocable trust, the trust holds those details, and the will becomes a safety net beneath it.
For a trust to work, assets must be inside it or have a way to get in. If you pass away before you’ve retitled an account or updated a beneficiary designation, your will acts as a catch-all.
Instead of spelling out your whole family story, this will just says one thing: Sweep whatever is left in your probate estate into the trust to be administered under its terms.
The myths that hold people back
The biggest misconception we hear is that trusts are wildly expensive and only for the wealthy. Most people simply don’t know what a trust is or how it works.
About 95% of the time, when someone says “trust,” they mean a revocable living trust (also called a living trust). There are many other kinds of trusts, including spousal lifetime access trusts, life insurance trusts and more. These trusts typically don’t enter the picture until you’ve built significant wealth.
Myths exist on the will side as well. Many people believe a will avoids probate. It doesn’t. Others assume that being named executor (or personal representative) automatically puts them in charge. It doesn’t either.
Until a will goes through the probate process and a court appoints someone as the executor or personal representative, the person named in the will has no legal power or authority.
Three key questions to ask yourself
If you’re trying to decide between a will and a trust, ask yourself the following:
1. How would your family get by in the weeks after you’re gone?
Probate can slow down access to money. Ask how important it is that your loved ones, especially a surviving spouse, can pay bills and keep living their lives. If immediate access matters, avoiding probate through a revocable trust deserves a serious look.
2. Who do you want doing the work?
Setting up a trust takes effort during your lifetime. Some families place a high value on making things efficient for their kids and grandkids while others don’t. The question is whether you’d rather put in the work now or leave the next generation to handle it later.
3. How much do you care about privacy?
Probate usually produces an inventory of what you owned. In most states, that inventory is a public document.
Some people do nothing but go through probate records looking for houses to purchase at a discount, and few families enjoy getting a “sorry for your loss, want to sell the house?” call. A trust keeps those details private.
Overall, the choice between a will and a trust isn’t about which is fancier or who’s wealthy enough to need one. It comes down to how much you value privacy, how quickly your family needs access to your assets, and whether you’d rather do the work now or leave it to the next generation.
Once you understand what each document does and what it doesn’t, the right answer will come into focus.
Shelby Anderson, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Shelby works closely with clients’ legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.
Patrick Schultz, J.D., CEPA®, is a Senior Wealth Planner at Clark Capital Management Group. In this role, Patrick works closely with clients’ legal and tax advisers to provide client-facing expertise across a wide range of wealth planning strategies.