Will vs. Trust: Which Is Right for Your Estate Plan?

When it comes to estate planning, one of the most common questions is whether you need a will, a trust, or both. While these terms are often used interchangeably, they are very different tools—each with unique advantages, limitations, and purposes. 

For high-net-worth individuals and families with complex estates, understanding the main differences between a will and a trust is critical. The choice you make can influence the distribution of your assets, whether your estate goes through the probate process, how much privacy your family has, and even how much you ultimately pay in estate taxes. 

This article explores the key differences between a last will and testament and a trust, when each might make sense, and how they can work together as part of a broader estate planning process.   

What is a Will? 

A will, short for “last will and testament,” is a legal document that outlines your wishes for how your assets should be distributed after death.

With a will, you can: 

• Name beneficiaries to inherit bank accounts, real estate, retirement accounts, and personal property. 

• Appoint guardians for minor children or dependents. 
• Designate an executor to manage the legal process of your estate. 

A will is the foundational document in most estate plans, but on its own, it may not be enough for families with substantial wealth or multiple types of assets. 

What is a Trust?  

A trust is a legal arrangement in which a grantor transfers assets into a trust document that is managed for the benefit of designated beneficiaries. Trusts can be tailored for different goals, including avoiding probate, managing assets during incapacity, or minimizing estate taxes. 

There are several types of trusts, but the two most common are: 

Revocable Living Trust 

• The grantor retains control of assets during their lifetime. 

• Assets in the trust bypass probate after death, transferring directly to beneficiaries. 

• Can be changed or revoked at any time while the grantor is alive. 

• Provides privacy, since trust assets are not part of the public record. 

Irrevocable Trust 

• Once established, the grantor gives up control of the assets. 

• Often used for tax benefits and asset protection. 

• May reduce exposure to the federal estate tax and protect wealth from creditors. 

• Common in complex estates where minimizing tax liability and protecting assets for future generations are priorities. 

Specialty Trusts for Complex Estates 

While revocable and irrevocable trusts meet the needs of many families, individuals with highly complex estates may benefit from more advanced trust structures. These specialty trusts are designed to address specific financial, tax, or family dynamics and can offer enhanced flexibility and protection. 

Examples include: 

• GRATs (Grantor Retained Annuity Trusts) – Useful for transferring appreciating assets while minimizing gift taxes. 

• SLATs (Spousal Lifetime Access Trusts) – Allow one spouse to benefit from trust assets while removing them from the taxable estate. 

• Dynasty Trusts – Preserve wealth across multiple generations with long-term tax advantages. 
• Charitable Remainder Trusts – Combine philanthropic goals with income and estate tax benefits 

These trusts require careful planning and legal guidance but can be powerful tools for high-net-worth individuals seeking to optimize their estate strategy. Learn more about specialty trusts here. 

Key Differences Between a Will and a Trust 

Here are the main differences to keep in mind when comparing a will vs. trust: 

When a Will Makes Sense 

A simple will may be enough if:

• You have a straightforward estate with few assets. 

• Your primary concern is naming guardians for minor children. 
• You want a cost-effective, easy-to-understand legal document. 

Even for high-net-worth individuals, a will is still a necessary part of an estate plan because it covers areas that a trust cannot, such as appointing guardians. 

When a Trust Makes Sense 

Trusts are particularly valuable for individuals with complex estates or specialized goals. You may benefit from a living trust or irrevocable trust if you: 

• Want to avoid the delays and costs of the probate court process. 

• Own real estate or other assets in multiple states (to avoid probate in each jurisdiction). 

• Desire privacy for the distribution of your assets. 

• Have significant wealth and want to reduce exposure to federal estate tax or state estate taxes. 

• Want to provide structured support for dependents or family members with special needs. 
• Need to ensure smooth management of financial accounts or a business in case of incapacity. 

For high-net-worth families, trusts also provide an effective way to establish a long-term legacy, protect assets, and create tax advantages that a will cannot offer. 

Do You Need Both a Will and a Trust? 

In most cases, yes. A revocable living trust is often paired with a last will and testament to ensure all aspects of your estate are covered. 

Here’s why: 

• A trust helps transfer assets efficiently and privately, while also providing management during incapacity. 

• A will acts as a safety net for any property not transferred into the trust, ensuring it’s distributed according to your wishes rather than by state laws. 
• Only a will can name guardians for minor children or appoint an executor to handle the final legal process of your estate. 

Together, they create a more complete estate planning strategy. 

High-Net-Worth Considerations 

For wealthy families, the will vs. trust decision isn’t just about avoiding probate—it’s about long-term preservation and control of wealth. Here are some additional points for high-net-worth individuals: 

• Tax Planning: Irrevocable trusts can help reduce exposure to federal estate tax and gift tax, while also shielding assets from creditors. 

• Family Governance: Trusts can establish rules for how wealth is used, providing structure for beneficiaries and avoiding conflict among family members. 

• Multi-Generational Planning: Trusts can ensure assets pass to children, grandchildren, or other heirs in a way that aligns with your values. 
• Liquidity: Life insurance placed in a trust can provide liquidity for paying estate taxes, protecting more of your estate for beneficiaries. 

The terms of the trust can be as detailed or as flexible as needed, making it one of the most powerful tools in modern estate planning. 

Common Misconceptions About Wills and Trusts 

“A will avoids probate.” False—wills go through the probate process, but make beneficiaries easy to identify to avoid contested assets. 

“Trusts are only for the ultra-wealthy.” False—while trusts are especially helpful in complex estates, even individuals with moderate wealth can benefit from them. 

“Once I create a trust, I don’t need a will.” False—a will still serves important functions, such as guardianship and covering assets not included in the trust. 

“Trusts eliminate all taxes.” False—while some trusts provide tax benefits, careful planning with an estate planning attorney is required to structure them effectively. 

The Estate Planning Process: Will vs. Trust in Action 

Here’s how these documents typically fit into the broader estate planning process: 

1. Inventory Your Assets – Include financial accounts, retirement accounts, insurance policies, and real estate. 
2. Define Your Goals – Are you most concerned about protecting a surviving spouse, minimizing estate taxes, or ensuring smooth transfers to beneficiaries? 
3. Consult an Estate Planning Attorney – Get legal advice tailored to your state laws and financial situation. 
4. Draft the Right Documents – For most families, this includes both a will and a trust. 
5. Update Regularly – Review documents after major life events (marriage, divorce, children, new property, or changes in tax laws).

Final Thoughts 

Deciding between a will vs. trust doesn’t have to be an either/or choice. A last will and testament provides the foundation for every estate plan, while a revocable living trust or other types of trusts can add privacy, flexibility, and tax advantages. 

For high-net-worth individuals, trusts are often essential for managing complex estates, minimizing estate taxes, and ensuring smooth wealth transfer to future generations. 

The right choice depends on your goals, your assets, and your family’s needs. With the help of an experienced estate planning attorney and financial advisor, you can design a plan that provides clarity for your loved ones, protects your wealth, and gives you peace of mind. 

Ready to explore the best approach for your estate? Talk with our team at Plancorp about how a will and trust can fit into your broader financial strategy.