Estate Planning 101: Wills & Trusts
Wills and Trusts: What You Need to Know
From when they take effect to how they are administered, wills and trusts have important differences to consider when creating your estate plan. That said, you won’t necessarily be choosing between one or the other—most complete plans include both. A will is the foundation of nearly every estate plan, but combining it with a living trust can help you avoid the blind spots that come with relying solely on a will. The biggest of these blind spots is that a will guarantees your family will go through court if you pass away or become incapacitated.
When Wills and Trusts Take Effect
A will only takes effect when you die. A trust, on the other hand, takes effect as soon as it’s signed and your assets are transferred into it, known as “funding” the trust. A will directs who will receive your assets at death, while a trust allows you to decide how and when your assets will be distributed—during your lifetime, at your death, or afterward. This is what can keep your family out of court and out of conflict.
Because a will doesn’t operate until death, it offers no protection if you become incapacitated. In that situation, your family would have to petition the court to appoint a guardian or conservator to make decisions for you, which can be expensive, stressful, and sometimes result in someone you wouldn’t want making critical decisions for your life and finances. A trust allows you to name someone you trust to step in if you cannot, avoiding court involvement and giving you peace of mind.
The Assets They Cover
A will covers any asset solely owned in your name. It does not control property co-owned with rights of survivorship, or assets that pass directly through beneficiary designations, such as life insurance, IRAs, and retirement accounts. Trusts, on the other hand, cover any asset properly transferred or “funded” to the trust. If assets aren’t funded into the trust, they won’t be covered—making proper funding one of the most important parts of the process.
We not only set up trusts, but also ensure your assets are inventoried and titled correctly, and we provide ongoing maintenance so new assets are funded into the trust as your life evolves. Even then, a “pour-over will” can act as a safety net, ensuring that any assets not already in the trust at the time of your death are transferred into it.
How They Are Administered
In order for assets in a will to be distributed, the will must go through probate—a court-supervised process. Probate can take months or even years, cost significant fees, and open the door to family conflict or challenges. It is also a public process, meaning anyone can see what your family inherits. Trusts, by contrast, are administered privately and outside of court, allowing for a smoother, faster, and more private transfer of assets.
Costs of Wills vs. Trusts
At first glance, wills usually cost less to set up than trusts. But because wills require probate, the overall expense can be much higher in the long run. Trusts cost more upfront, but they often save families significant time, money, and stress later. The right choice depends on your family, your assets, and your long-term goals.
Choosing the Right Plan
Every family’s circumstances are unique, which is why most estate plans include both a will and a trust. The key is understanding how they work together, and ensuring your plan is properly set up and maintained so that it works when it’s needed most. We help you make the right decisions for your situation, giving you confidence that your family will be protected, your wishes honored, and your legacy preserved.
