US Estate Planning: Wills vs. Trusts and Your Best Options
- Del Sol CPA
- Aug 14
- 3 min read
Updated: Nov 2
The two most common estate planning tools are wills and trusts. In this article, we will focus more on the latter as trusts are a far more flexible and comprehensive structure that can be used to address a variety of estate planning challenges.
The Fundamentals: Preparing a will Wills, trusts, and estate planning
The most basic, and common, form of estate plan is a will. A Will is a legal document that provides specific instructions for distributing assets to beneficiaries after death. Wills only take effect after your death, are fairly straightforward and cost-efficient to prepare, and are generally useful for ensuring that there is at least some measure of control over how your assets will be handled.
Importantly, wills can be contested, and therefore provide no guarantees that your wishes will be followed – and alone, they don’t provide any means of reducing estate taxes. Furthermore, the probate process is public, meaning that anyone can access the details of your will.
Despite these flaws, having a will is absolutely preferable to no estate plan at all. As we mentioned earlier, dying without a will means that your belongings will be distributed by the court. Typically assets are distributed in order of: surviving spouse, children, extended family, descendants, and finally the state if no family can be found. We even suggest those who have trusts in place to also have a well-drafted will, as these documents complement each other. A will can also dictate the creation of a testamentary trust, which takes effect after death.
The best thing about wills is that getting started is easy, and they can always be updated as you go through life events and changes. There are plenty of helpful online templates available that lay the groundwork for you – just make sure you choose one that fits your state’s laws.
As always, we recommend consulting a certified professional or a legal expert to help in reviewing or writing your draft, to ensure that your terms fit the laws of your jurisdiction and accurately represent your wishes.
Beyond the Basics: The Power of Trusts
While a will provides essential direction for asset distribution, it represents just the foundation of comprehensive estate planning. For individuals seeking greater control, privacy, and tax efficiency, trusts offer a more sophisticated approach to wealth transfer and asset protection.
Unlike wills, which only activate after death and must navigate the public probate process, trusts can take effect immediately and operate without oversight from the courts or the public.
This fundamental difference makes trusts particularly valuable for those who want to maintain confidentiality around their financial affairs or ensure seamless asset management during periods of incapacity.
Trusts also provide unmatched flexibility in how and when beneficiaries receive their inheritance. Rather than a simple lump-sum distribution dictated by a will, trusts can establish sophisticated distribution schedules, performance incentives, or protective measures for beneficiaries who may not be ready to handle significant wealth responsibly.
Most importantly for high-net-worth individuals, trusts offer legitimate strategies to reduce estate tax liability—something a will alone cannot accomplish. By removing assets from your taxable estate through irrevocable trust structures, you can potentially save your heirs substantial tax burdens while still providing for their financial security.
The complexity of trust planning reflects its power. While anyone can benefit from basic trust structures, those with significant assets, complex family situations, or specific wealth transfer goals will find trusts indispensable tools for achieving their estate planning objectives.
📚 Article Series: US Estate Planning
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