Wills vs. Trusts: How to Protect Your Legacy and Avoid Costly Mistakes

Published on February 18, 2026 | 8 min read | Webster Bank

Wills and Trusts are both very common tools used in estate planning; however, they each have different functions. Generally, a will helps individuals with simpler estates, with minor children, and a more straightforward approach when it comes to the distribution of their assets. A trust may be attractive to privacy-conscious individuals with a more complex estate. To determine which choice may work for you and your estate planning goals, we want to provide you with a more in-depth analysis of the two.

Wills

• Responsibility – Instructions for how your assets are distributed after death.
• Privacy – Your will is not public during your lifetime; however, after you die, it becomes a public record for anyone to view after going through probate.¹
• Custodianship – Wills can name guardians for minor children.
• Probate – Wills go through probate, a court-supervised legal process that validates a will and oversees the distribution of a person’s assets (the estate) after they die.
• Cost – Typically less expensive to create than trusts.
• Activation – Wills take effect upon death.²

A will differs from a trust in that it is generally simpler and less costly to create. Also, only a will can be used to designate guardians for minor children, making it an essential document for parents, along with a trust if that aligns with your estate planning strategy. Trusts are often sought out as a way to safeguard estates against probate and to maintain privacy and control. However, smaller estates may fall below the probate threshold in the state where you reside and therefore will avoid the complex probate process or another streamlined version. There are instances, for example, if a family dispute is inevitably going to arise, or the executor requires the court’s authority, that the probate process overseeing the will might be desired by the beneficiaries.³

Trusts

• Responsibility – Holds and manages assets, both during life and after death.
• Privacy – Trusts can offer more privacy as they generally avoid probate.⁴
• Custodianship – Trusts can be used to manage assets for minor children; however, they do not directly appoint guardians.
• Probate – Trusts can avoid probate, allowing for faster and more private distribution of the deceased’s assets.
• Cost – Trusts can be more expensive to create than wills.
• Activation – Trusts can take effect during life and death.⁵

Trusts are more complicated than wills. Here are some key factors to consider when exploring trusts.

There is a designated trustee

A trustee is someone who will manage your trust after you die. They are typically adult family members or financial professionals who will carry out your directives. The trustee does everything from settling leftover bills, completing your final income tax returns, selling real estate, sorting out your investments, dealing with insurance benefits, emptying your home(s), and even arranging funeral responsibilities. To ensure your wishes are realized, consider appointing multiple trustees to work together. The trustees must adhere to the “Prudent Investor Rules,” which state that a trustee must be conservative and careful in managing the trust’s assets.

Funding your trust

Your trust has to be fully funded at the time of your death to avoid probate. Funding means transferring assets to the trust. If assets get left out of the trust, they will go through probate. In a bank account, for example, the trust can be named co-owner or a beneficiary of the account. Real estate, for example, is transferred to a trust, in most cases, by using a deed. The deed then gets made out to the trustee. This action will either get accomplished by a quitclaim deed or a warranty deed.⁶

Other details to account for

Regarding retirement accounts like IRAs, 401(k)s, and Keoghs, transferring these accounts to a living trust may be taxable. Therefore, your name should not be on the trust but as a contingent beneficiary of the account(s), and keeping your spouse, if you have one, as the primary beneficiary. As for smaller items that don’t have titles like collections, furniture, etc., a general assignment form is used to assign these assets to the trust. Animals with pedigree papers can be put in trust ownership, as can an aircraft if FAA rules are followed. Everybody is different and has varied assets and interests, so it is recommended that a professional is involved in helping you through this oftentimes complex journey.

Modifying your trust

Trusts are easier to change compared to wills. To change a will, you have to sign a codicil, a written amendment to the will that the attorney prepares and may be required to be signed with witnesses or by a notary. A revocable trust can be changed as long as you are deemed mentally competent.

There are a wide variety of trusts. Some of the more popular ones are as follows:

Revocable Living Trusts

A revocable living trust is the most popular kind of trust. You are 100% in control, and it protects the privacy of those involved, minimizes estate taxes, and avoids probate. You can transfer new assets into it or remove ones already there. You can add or remove beneficiaries. You can revise the terms if you wish or terminate them.

A downside to this instrument is that there is no asset protection against creditors or a lawsuit. With a living trust, you still have a will. It is called a “pour over” will. A pour-over will ensures any of an estate’s assets not already included in a trust will transfer into the trust when an individual dies. The trust becomes the arbiter of all matters involving your estate. If you don’t have a living trust, for example, all your assets go before the court to be assessed which can be very time-consuming and expensive. It then becomes the public record.

A living trust is not just for the wealthy. In movies you hear the term “trust-fund baby” thrown around regarding children of affluent families. A living trust is beneficial for anybody regardless of income level. For example, if you marry someone with children from another marriage and you want them to be included in your estate plan, a living trust can help prevent them from getting disinherited should your estate go before a judge to sign off on the asset transfer (probate).7

Irrevocable Trust

This trust protects your beneficiaries from creditors and future lawsuits. You can establish an extended payment schedule for beneficiaries whereby they can receive sums of money at various intervals throughout their lifetime. A downside to the irrevocable trust is that it can be challenging to modify, and you cannot act as your trustee, meaning you lose control over it.⁸

Charitable Remainder Trust (CRT)

You can put an individual retirement account (IRA) in the name of a CRT instead of your children’s name. Upon your death, the trust oversees the wealth, converting your retirement funds into assets that generate income and then provides your children monthly or annual income, potentially for the remainder of their lives. The CRT is attractive because it can avoid the 10-year income acceleration brought on by the “SECURE” Act.⁹

Grantor Retained Annuity Trust (GRAT)

In this circumstance, an irrevocable trust gets utilized for a time. This trust is a financial instrument that can reduce the tax burden on large financial gifts to family members. With the establishment of this trust, a large-gift value gets created. An annuity then gets paid out to the grantor each year. At the expiration, the beneficiary receives the asset(s) and pays little or no gift taxes.¹⁰

Generation-Skipping Trust (GST)

A legally binding trust agreement where the assets are passed down to the grantor’s grandchildren, essentially “skipping” the grantor’s children. Doing this protects the assets from estate taxes. GST is an effective estate planning tool for high-net-income individuals.¹¹

Consult a Financial Professional

Partnering with a financial professional is critical for understanding how to structure and manage a comprehensive will and trust so that the financial aspects and allocation of assets are aligned to your wishes, as effectively as possible. A financial professional has the knowledge and experience to help create a holistic picture of your finances. They work with you, one-on-one, to design a plan with the goal of reducing the nuances of estate planning that dip into the value of your estate. They work to structure the will and trust to potentially avoid unnecessary fees, such as probate court and tax liabilities, ensuring the liquidity of your assets, for example, to cover immediate expenses that you don’t wish to leave as a burden on your loved ones, to simplify the distribution of those assets or to align with a different approach such as the legal framework for a planned giving strategy, which involves using estate planning tools and tax regulations that help to facilitate donations to qualified charities. It is all a part of reinforcing your legacy based on your wishes. Don’t wait to do this. Time goes by quickly. Schedule a meeting with us today.

Important Disclosures:

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

All information is believed to be from reliable sources; however, LPL makes no representation as to its completeness or accuracy.

This article was prepared by LPL Marketing Solutions

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Footnotes

¹ Wills: How They Go From Probate to Public Record

² What is a Will? – Estate Planning – Fidelity

³ Will vs. Trust: Which Is Right For You?

⁴ Trusts for Privacy

⁵ What Is A Trust? – Fidelity

⁶ Funding a Living Trust

⁷ Revocable Trusts

⁸ Irrevocable Trusts: Advantages, Disadvantages, and Tips

⁹ The Compelling Advantages of a Charitable Remainder Trust – Planned Giving Marketing Trusted Authority | Official Site

¹⁰ Grantor Retained Annuity Trust (GRAT): Definition and Example

¹¹ Generation-Skipping Transfer Tax: How It Can Affect Your Estate Plan | U.S. Bank