Will vs. Trust - What's the Difference, and Which Is Right for Me?

Planning your estate involves making crucial decisions about how your assets will be distributed after you pass away. Here in Norwalk, CT, and across the country, individuals often rely on wills and trusts to ensure their wishes are honored. Understanding the differences between these estate planning tools can help you decide which option aligns with your financial goals and legacy planning needs.

What Is a Will?

A will is a legal document that outlines your wishes regarding the distribution of your assets and the guardianship of minor children. Wills are typically simpler and more cost-effective to create than trusts, making them a popular choice for straightforward estate planning. However, one downside of using a will is the requirement to go through probate—a formal process that can be time-consuming and may place your estate details in public records.

What Is a Trust?

A trust is a legal entity where a trustee holds and manages assets on behalf of designated beneficiaries. One common type is the revocable living trust, which allows you to retain control of your assets during your lifetime while specifying how they should be distributed after your death. Trusts offer significant advantages, such as bypassing probate, which keeps your financial matters private and can speed up the transfer of assets to your beneficiaries. This can be especially beneficial for those with more substantial estates or complex family dynamics.

Key Differences Between Wills and Trusts

Here are the major distinctions between wills and trusts in estate planning:

• Probate Process: Wills must go through probate, which can be lengthy and public. Trusts allow for a private, quicker distribution of assets, avoiding probate.

• Privacy: Wills become part of public records through probate, while trusts keep your estate details confidential.

• Control Over Assets: Trusts provide more flexibility, allowing you to set specific conditions for asset distribution, unlike wills.

• Cost and Complexity: Wills are simpler and less costly to create, whereas trusts may require more time, effort, and expense to set up and maintain.

Who Should Consider a Will?

If you have a modest estate and straightforward distribution wishes, a will might be sufficient for your estate planning needs. Wills are also essential for naming guardians for minor children. Typically, individuals who do not own real estate or have limited assets may lean towards using a will. Consulting with a trusted financial advisor can help ensure your will aligns with your goals and provides the necessary protections.

Who Should Consider a Trust?

Those with larger estates, complex family structures, or privacy concerns may find that a trust better suits their needs. Trusts are ideal for individuals seeking asset protection and more control over their wealth distribution. Engaging in legacy planning with a professional in Norwalk, CT, can help you establish a trust that secures your financial future, protects your beneficiaries, and meets your specific estate planning objectives.

Using Both a Will and a Trust

In many cases, a combination of a will and a trust offers the most comprehensive estate plan. For instance, a will can address any assets not included in the trust and name a guardian for minor children, while the trust manages other assets to avoid probate. By consulting with a financial advisor skilled in estate planning here in Norwalk, CT, you can find the right balance to meet your specific needs.

Conclusion

Deciding between a will and a trust depends on your unique circumstances, including the size of your estate, privacy concerns, and your desired asset distribution. At Davenport & Associates, we specialize in estate and wealth planning for clients both locally in Norwalk, CT, and across the country. Led by our founder, John Davenport, a seasoned financial advisor with a commitment to personalized service, our firm is dedicated to helping you protect, preserve, and grow your wealth. Consulting with our team can provide the guidance needed to create a comprehensive estate plan that ensures your wishes are honored and your legacy is secure.