Trust vs. Will: What’s the Difference, and Which Do Your Clients Need?

You’ve likely had clients ask, “Do I need a will or a trust?” It’s a common question that deserves a thoughtful, personalized response. 

The confusion between wills and trusts often leads clients to make decisions that don’t fully address their specific needs. Without proper guidance, they might opt for the simplest solution without understanding the long-term implications for their families and estates.

This guide will equip you with clear explanations of the key differences between wills and trusts, their respective advantages and disadvantages, and a framework for helping clients determine which option or combination of options best suits their unique situation, positioning you to provide comprehensive financial guidance that extends beyond investment management to true legacy planning.

What is a will?

When advising clients about estate planning basics, you’ll want to explain that a will is a legal document expressing how someone wants their assets distributed after death. In straightforward terms, it’s their written instructions for what happens to property, possessions, and even the care of minor children after they pass away. Unlike a trust, a will only takes effect after death.

According to a 2025 survey by Caring.com, only 24% of American adults have a will, highlighting an opportunity for advisors to provide critical guidance that can prevent state law directed  asset distribution and court appointed  guardianship decisions.

What does a will include?

When discussing will components with clients, emphasize these key elements:

• Executor: This is the person your client appoints to carry out the instructions in their will. The executor is responsible for managing the estate through the probate process, paying debts and taxes, and ensuring assets are distributed according to the client’s wishes.
• Beneficiaries: These are the individuals or organizations who will receive your client’s assets. They can specify exactly who gets what in their will, from family members to friends to charitable organizations.
• Guardian appointments: For clients with minor children or dependents, a will allows them to name guardians who will care for these dependents if both parents die.

Instructions for asset distribution: The will clearly specifies who receives which assets. For instance, your client John might specify that his daughter receives his house, and his son receives the family business.

Advantages of a will

When counseling clients, especially those with straightforward financial situations, highlight these key benefits of wills:

Affordability

Wills are generally inexpensive to set up, often requiring minimal upfront costs. Creating a simple will can cost as little as a few hundred dollars or even less with DIY services. This can be particularly appealing to younger clients or those just beginning their estate planning journey.

• Simplicity and ease of understanding: For clients who value straightforward solutions, explain that a will is generally easy to understand and execute. Wills are ideal for uncomplicated asset distribution plans (e.g., assets divided equally among children)
• Ability to appoint guardians for minor children: For clients with young families, stress that wills allow the explicit naming of guardians to care for minor children after the parents’ death, an essential function that trusts alone cannot provide.
• Ease of Updating and Modifying: For clients whose circumstances frequently change, highlight that wills can easily be updated or modified throughout their lifetime (after marriage, divorce, births, deaths).

Disadvantages of a will

To provide balanced guidance, you should also help clients understand these potential limitations of wills:

• Probate requirements: Clients need to understand that probate is a court-supervised process for validating a will and distributing assets. It’s often lengthy, costly, and public, and assets passing through a will generally must go through probate. Probate costs can consume between 3% and 8% of an estate’s value, and the probate process can take between six months and several years to complete. 
• Lack of privacy: For privacy-conscious clients, explain that wills, once filed in probate court, become public records accessible by anyone, exposing private financial details. 
• Incapacity limitations: Clarify that wills provide no management or protection if the client becomes incapacitated; wills only take effect after death. Separate documents, like powers of attorney or trusts, are necessary for incapacity planning.
• Limited control after asset distribution: While wills can contain provisions to distribute assets in trust for the benefit of a beneficiary, often they distribute assets outright, offering limited or no control over how the beneficiary manages assets after receiving them as long as the beneficiary is 18 years or older.
• What is a trust?

A trust is a legal arrangement where assets are managed by a trustee on behalf of beneficiaries. Unlike a will, a trust takes effect during your clients’ lifetime – typically upon signing and funding – and continues after death. This distinction is crucial for clients who need ongoing asset management.

Help clients understand the three main roles in a trust:

• Grantor (also called settlor or trustor): Your client who creates the trust and transfers assets into it
• Trustee: The individual or institution responsible for managing the trust assets according to your client’s terms (typically also the grantor while they are alive and not incapacitated if it’s a revocable trust (more on this later))
• Beneficiary: The person(s) or organizations who receive the benefits of the trust assets

Advantages of a trust

When discussing more comprehensive estate planning with appropriate clients, highlight these significant benefits of trusts:

• Avoids probate process (faster asset transfer): For clients concerned about efficiency and minimizing delays, emphasize that trusts, if properly funded, bypass probate, allowing assets to transfer directly to beneficiaries quickly.
• Maintains privacy (no public probate): Unlike wills, trusts avoid public probate, meaning financial and personal details remain confidential.
• Provides incapacity management: Trusts ensure continuity if clients become incapacitated by allowing a successor trustee to step in seamlessly without court intervention.
• Detailed conditions and control over asset distribution: For clients who want to influence how beneficiaries use their inheritance, trusts can outline detailed conditions or restrictions as to when and how trust assets are distributed, including age-based milestones and education funding, which can help ensure financial maturity before receiving significant amounts.

Disadvantages of a Trust

It’s also important to help clients understand the potential limitations of trusts:

• Higher upfront cost and complexity of setup: For budget-conscious clients, be transparent that setting up a trust usually involves greater initial expense and complexity compared to a simple will. While this can be done DIY, some clients prefer to enlist professional legal help depending on their situation. Establishing a basic revocable living trust typically costs between $1,500 and $2,500, depending on complexity and location. This cost comparison is important context: While creating a simple will might cost a few hundred dollars, setting up a trust often involves legal fees amounting to several thousand dollars due to detailed paperwork and legal advice.
• Need to retitle (fund) assets and ongoing maintenance: The requirement to transfer (retitle) assets into the trust (“funding”) involves significant initial effort and ongoing diligence, typically involving banks, other financial institutions, and government offices.
• Cannot name guardians for minor children: For clients with young families, clarify that trusts cannot legally designate guardians for minors, which must be addressed separately through a will. 
• May be overly complex for smaller estates: The complexity and costs of managing a trust may outweigh its benefits for clients with smaller, less complicated estates, such as a home and savings. 

Types of trusts

You’ll want to be familiar with various trust options available to meet different client needs. Sharing this knowledge helps clients determine which trust might best fit their specific goals.

Revocable living trust

A revocable living trust is created during a person’s lifetime and can be modified or terminated at any time, as long as the grantor (creator) is mentally capable. Help clients understand why it’s the a popular choice as part of a foundational estate plan:

• Flexibility: Allows changes as life circumstances evolve (e.g., marriage, divorce, birth of children)
• Avoids probate: When properly funded, ensures efficient, private distribution of assets after death
• Provides management of assets if the grantor becomes incapacitated

Irrevocable trust

An irrevocable trust is typically established for long-term planning (e.g., tax benefits, asset protection, Medicaid eligibility) and to minimize taxes while protecting assets from creditors. Unlike a revocable trust, an irrevocable trust generally cannot be modified or terminated without the beneficiary’s consent.

Testamentary trust

A testamentary trust is established within a will, only coming into effect after the creator’s death. It’s commonly used for managing inheritance for minor children or setting conditions on inheritances.

Special needs trust

A special needs trust is specifically designed to financially support a beneficiary with disabilities without jeopardizing their eligibility for public assistance programs (e.g., Medicaid or SSI). Special needs trusts have become increasingly important as medical advances help individuals with disabilities live longer, fuller lives. 

Charitable trust

A charitable trust is used primarily to provide support to a charitable cause, organization, or foundation, often offering tax advantages. 

There are two common types: Charitable remainder trusts (CRT) and charitable lead trusts (CLT). They act as the reverse of one another: A CRT disperses income to the non-charitable beneficiaries, then allocates the remainder of the trust assets to one or more specified charities. A CLT disperses income to one or more named charities, while the non-charitable beneficiaries receive the remainder of the assets left in the trust at the end of the trust term.

Key differences between a will and a trust

As you guide clients through estate planning decisions, help them understand how wills and trusts differ in their features and benefits. These distinctions will make it easier for you to help your client understand the different options available to them so that they can pick the one that best matches their specific needs.

• Effective date: Wills take effect after death, whereas trusts take effect immediately once assets are transferred (during life and after death). 
• Probate process: Probate is the court-supervised validation and distribution process after death. Wills require probate, which can delay distributions, while trusts, if properly funded, bypass probate entirely.
• Privacy: Wills become public records during probate, exposing asset details, while trusts remain private with no public disclosure of assets. This privacy difference can be particularly important in sensitive family situations.

Helping clients understand the differences between a will and a trust

For some clients, trying to make the right decision between a will, trust, or both can be overwhelming. Use this framework to help them consider their options:

Estate size and complexity

• Small, straightforward estates (few assets, no real estate) often only require a simple will.
• Larger, more complex estates (e.g., multiple properties, businesses, substantial investments) generally benefit from trusts to avoid probate complexities.

Family situation

• Families with minor children should always have at least a simple will to name guardians.
• Blended families or complicated family relationships may particularly benefit from a trust to prevent disputes or clearly control inheritance distribution.

Desire for privacy

• The privacy differences between a will (public probate process) and a trust (private) are substantial.
• Anyone concerned about privacy (e.g., sensitive family situations or financial privacy) should strongly consider a trust.

Budget

• Wills have low initial costs, making them suitable for limited budgets or straightforward estates.
• Trusts have higher upfront costs but can save families money in the long run by avoiding probate expenses.
• If your client is working within a tight budget, a simple will may suffice now; however, if assets might incur significant probate fees later, investing in a trust upfront might ultimately save their beneficiaries money.

Control over asset distribution

• Wills may contain testamentary trust provisions, but tend to distribute assets outright after probate.
• Trusts offer the flexibility to impose detailed conditions or timelines for inheritance (e.g., age requirements, usage conditions).

How a will and trust work together

A complementary approach often provides the most comprehensive estate plan through the combined use of a “pour-over will” with a revocable living trust:

• A revocable living trust manages most major assets (like homes, investment accounts, or other valuable items), allowing them to avoid probate, maintain privacy, and manage detailed inheritance conditions.
• A pour-over will acts as a safety net, catching any assets not placed into the trust by the time of death and transferring (“pouring over”) these assets into the trust to ensure they’re still distributed according to your client’s wishes.

Using both documents together provides a complete plan—covering major assets through a trust, minor guardianship decisions through a will, and ensuring nothing is missed. Be aware that any assets flowing through the pour-over will triggers probate for these assets. So it is important to make sure the revocable trust is properly funded.

Guiding clients through critical estate planning decisions

Don’t let your clients leave their legacy to chance. Helping them understand the differences between trusts and wills, along with the implications of each for their specific situations, differentiates you as an advisor who cares about their complete financial wellbeing, not just their investment returns.

Vanilla’s estate planning software enables you to introduce the estate planning conversation naturally and organically. Our Estate Health Check questionnaire is a simple and accessible first step – clients answer a few questions about their assets, documents, and wishes, and the platform surfaces insights about potential gaps and opportunities.

Click here to learn more about how Vanilla empowers advisors to deliver highly personalized estate planning solutions for every client.

 

The information provided here does not constitute legal, financial, or tax advice. It is provided for general informational purposes only. This information may not be updated or reflect changes in law. Please consult with an estate attorney, financial advisor, or tax professional who can advise as to your particular situation.