When planning your estate, you might wonder whether a trust or a will is the better choice. Both documents ensure your wishes are carried out, but they serve different purposes. The right option depends on your family’s needs, your financial situation, and how much privacy and control you want over your estate. Understanding the main differences between these two tools can help you make informed decisions about protecting your assets and your loved ones.
1. Probate Requirements
One of the biggest differences between a will and a trust is probate. A will must go through probate, a court-supervised process that validates the document and oversees the payment of debts and distribution of assets. While this adds some time and expense, probate also provides legal oversight, which can help prevent disputes in certain families.
A trust usually avoids probate altogether, allowing assets to be distributed privately and more quickly. However, this benefit only applies to assets properly transferred into the trust during your lifetime.
2. Privacy and Public Record
A will becomes public once it’s filed in probate court, meaning anyone can access information about your estate. This transparency may not be ideal for families who value discretion or want to protect personal or financial details.
A trust, on the other hand, remains private. Only the trustee and beneficiaries can see its terms. For many Wisconsin families, especially business owners or those with sensitive family matters, this privacy can be an important advantage.
3. Timing of Control and Effect
A will takes effect only after your death, offering no help if you become incapacitated. For some people with straightforward finances, that’s sufficient.
A trust becomes effective as soon as it’s signed and funded, providing a way to manage assets during your lifetime. If you become incapacitated, your successor trustee can step in to handle your affairs. This feature is helpful for those with complex or higher-value estates.
4. Flexibility and Asset Management
Trusts provide greater flexibility and control over how assets are managed and distributed. You can:
- Delay distributions until beneficiaries reach a certain age
- Require funds to be used for education, healthcare, or other specific purposes
- Plan for long-term care or disability
A will, by comparison, is more straightforward. It directs how your property should be distributed after your death. However, wills can also incorporate a testamentary trust, which is created through your will and takes effect after your death. This allows you to set conditions for how and when beneficiaries receive assets, similar to a living trust, while still going through probate.
For families with simpler estates, a will with a testamentary trust can offer a balance between affordability and control, without the upfront cost of establishing a separate living trust.
5. Cost and Complexity
A will is generally less expensive to create and maintain, making it a practical choice for smaller or less complex estates. The tradeoff is that probate costs may arise later.
A trust requires more effort and expense upfront to set up and fund, but it can streamline administration and potentially reduce future costs. The best option depends on whether you prefer lower upfront costs or smoother long-term management.
6. Property in Multiple States
If you own property in more than one state, a will can complicate things. Each property may require its own probate proceeding, which adds time and legal costs.
A trust can consolidate ownership and avoid multiple probate processes. By placing all properties into one trust, you create a single plan that governs how everything is managed and distributed. This can make administration far more efficient for your successor trustee.
7. Naming Guardians for Minor Children
Only a will can name guardians for your minor children. A trust cannot perform this function. For this reason, many people choose to have both a will and a trust, using the will for guardianship and the trust for managing financial assets. Together, they ensure your children are cared for and your estate is efficiently managed.
Choosing the Right Estate Planning Tools
There’s no single answer to whether a will or a trust is better—it depends on your goals, your assets, and your family structure. Many Wisconsin families use one or the other, while others benefit from having both. A will provides legal clarity and simplicity, while a trust offers ongoing management and privacy.
We’ll help you determine which approach best fits your needs and create a plan that balances convenience, cost, and control.
Plan Today, Protect Tomorrow
Estate planning is about preparation and peace of mind for those you care about most. Contact Borakove Osman LLC to learn how a will, a trust, or both can secure your legacy and simplify the process for your family.
