Will vs. Trust: Which Best Protects Your Wealth and Legacy

Article from Focus Partners

A Last Will and Testament and a Revocable Trust are two essential tools for distributing assets — but which one is the right fit for your estate plan?

Estate planning isn’t just about distributing assets — it’s about protecting your legacy, preserving family harmony, and ensuring wealth is transferred with precision, discretion, and control. Two key instruments at the core of that strategy are the Last Will and Testament and the Revocable Trust.

While both tools direct how your assets are passed on after death, they differ significantly in how they are executed, how flexible they are, the privacy they offer, and their impact on heirs. Understanding these differences is essential for those with complex estates or sophisticated planning needs.

The Last Will and Testament: A Foundational Tool

A Last Will and Testament outlines how your solely owned assets should be distributed upon your death. It also allows you to name guardians for minor children and make charitable bequests. However, wills must go through probate — a public, court-supervised procedure to validate the will and settle debts before distributing assets to beneficiaries. This process can take time and become expensive.

Pros:

• Simple and cost-effective. Wills are generally easier and less expensive than trusts to establish.
• Allows guardianship designation. You can name guardians for your minor children.
• Adaptable over time. In certain states, you can update bequests with a letter or memorandum listing items you want to give to specific beneficiaries. You can revise this list as needed.

Cons:

• Subject to probate. For high-value estates, the process can be costly, time-consuming, and expose assets to public scrutiny, potentially delaying distribution.
• Public disclosure. Once filed, the contents of your will become public record, exposing family and asset information.
• Limited control over asset distribution. Once assets are dispersed, there are no safeguards to protect them from creditors or beneficiary mismanagement.
• Increased risk of challenges. Significant wealth can make wills more susceptible to contests from disgruntled heirs or outside parties.

The Revocable Trust: Discretion, Control, and Efficiency

A Revocable Trust is a legal entity that holds and manages your assets. It allows you to transfer ownership of assets to the trust during your lifetime, which continues to manage and distribute them upon your death. At that time, the assets in your trust will not be subject to probate if they are properly titled. This way they can be distributed more efficiently.

Pros:

• No need for probate. Assets pass directly to beneficiaries, avoiding court delays and expenses.
• Privacy protection. A trust remains confidential, keeping details of your estate and beneficiaries from public record.
• Continuity of control. If you are the grantor of the trust and you become incapacitated, your successor trustee can access the assets more seamlessly without court intervention.
• Tailored distribution strategies. You can outline how and when heirs receive distributions with specific conditions for inheritance. This ability helps with multi-generational planning, philanthropy, or protecting heirs from overspending or liability.

Cons:

• Upfront complexity and cost. Setting up a trust requires legal guidance, funding, and asset titling.
• Requires active management. You must ensure that assets in the trust are properly titled — otherwise, they will likely require probate.
• Not ideal for small estates. For those with minimal assets, the costs and complexities may outweigh the benefits.

What’s the Best Option for Your Situation?

For individuals with significant wealth, privacy concerns, multiple real estate properties, or complex family dynamics, a revocable trust is often the preferred tool. A will is often suitable for those with minimal assets and who won’t mind the probate process. In many cases, using both is the most effective option for creating a comprehensive estate plan. The trust manages and distributes most of your estate while a will catches any assets not titled in the trust and directs them into it at death.

Ultimately, a financial advisor can help you determine which option aligns best with your goals. By developing a thorough understanding of each strategy, you can make informed decisions that best protect your wealth and legacy.

Squire Investment Management Company, LLC (“Squire”) is an investment adviser registered with the United States Securities & Exchange Commission. Registration as an investment adviser does not indicate any level of skill or training. This document was created for informational purposes only and serves as general market commentary; it does not constitute investment advice, nor is it intended as an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is neither indicative nor a guarantee of future results. The investment opportunities referenced herein may not be suitable for all investors. All data or other information referenced herein is from sources believed to be reliable; however, Squire cannot guarantee the accuracy of information obtained from third parties. The data and information are provided as of the date referenced. Such data and information are subject to change without notice.