Estate planning is one of the most important steps you can take to protect your assets and loved ones. Two of the most common tools used in estate planning are wills and trusts. Understanding the differences between them can help you make an informed decision about what’s best for your financial and personal situation.
What Is a Will?
A will is a legal document that outlines how you want your assets distributed after your death. It can also name guardians for children and specify your final wishes. Wills are relatively simple to create, but they must go through probate, a court-supervised process that validates the will and oversees the distribution of assets. While probate ensures everything is handled legally, it can also be time-consuming, public, and sometimes costly.
What Is a Trust?
A trust is a legal arrangement that allows a third party (the trustee) to hold and manage assets on behalf of beneficiaries. Unlike wills, trusts can go into effect while you’re still alive and typically allow your estate to avoid probate. This means your heirs can receive their inheritance more quickly and privately. There are many types of trusts: revocable, irrevocable, special needs, and more. Each one is designed for specific goals, such as asset protection, tax efficiency, or long-term care planning.
Which One Should You Choose?
Choosing between a will and a trust depends on your goals, the complexity of your assets, and your family’s needs. A will may be sufficient for smaller estates and simple distributions, while a trust can offer more privacy, control, and efficiency, especially for larger estates or blended families. Often, a combination of both provides the best protection.
How Walters Financial Wellness Can Help
At Walters Financial Wellness, we help clients navigate every aspect of their financial journey, from estate planning and asset protection to retirement readiness and debt management. Whether you’re just starting to plan your estate or updating an existing plan, we’ll help you build a strategy that protects what matters most. Contact us today to start the process.