US Estate Planning: Wills vs. Trusts and Your Best Options
- Del Sol CPA
- Jan 15
- 3 min read
The two most common estate planning tools are wills and trusts. In this article, we will focus more on the latter as trusts are often described as more adaptable structures 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.
In some jurisdictions, they may be challenged, and the administration process, commonly referred to as probate, can involve court oversight – 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, asset distribution is determined according to statutory rules, which commonly prioritize a surviving spouse, children, and other relatives, depending on local law. If no family can be found. Even individuals who have established trusts are often advised to maintain a properly 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. It is important to ensure that any document complies with the laws of the relevant jurisdiction.
Many individuals choose to consult a qualified professional when reviewing or preparing estate planning documents, to help confirm that they align with applicable laws and reflect their intentions.
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 can function without direct court involvement, subject to local regulations.
This fundamental difference makes trusts particularly valuable for those who want to maintain confidentiality around their financial affairs or may be appealing to individuals who wish to plan for asset management during periods of incapacity.
Trusts may also allow for more customized approaches 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.
Trusts are sometimes used as part of broader discussions around tax exposure and wealth transfer, something a will alone cannot accomplish. By removing assets from your taxable estate through irrevocable trust structures, may play a role in estate tax planning; however, the suitability and effectiveness… depend heavily on individual circumstances and applicable tax laws, 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 often seek professional guidance to determine whether a trust may be appropriate for achieving their estate planning objectives.
📚 Article Series: US Estate Planning
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