There are two tools available for passing the bulk of your financial legacy. The best choice for one person might not be optimum for another. Either a will or trust can be the foundation of your estate plan. If it’s a trust, it’s usually a revocable living trust.

They’re not exclusive. Most estate plans have both a will and one or more trusts. But usually one document controls how the bulk of the estate is distributed and implements your most important decisions.

Consider the differences between the two tools carefully, because the best choice depends on your situation. A key distinction between a will and a trust is that property subject to a will goes through probate. Property owned by a trust avoids probate. Probate has pluses and minuses.
The major disadvantages of probate are its well-known cost and delay.

Probate requires an inventory of the estate’s assets and liabilities be compiled and submitted to a court with the will. The court reviews all this and allows people an opportunity to challenge the will. Assets can’t be distributed to heirs until the court approves.

The court charges probate fees, and a lawyer or executor (or both) often are involved and charge fees. In some states it can be costly and expensive for even small estates to go through probate.

Probate is not lengthy and expensive in all states. Some states have streamlined probate processes, especially for modest estates, making it less expensive and time-consuming. These states reserve the traditional probate process for the most valuable estates. Check with your estate planner about the local process and cost.

Lack of privacy is another disadvantage of probate. After it is filed with the court, a will is open to the public. The wills of many celebrities are available online. Bing Crosby is said to have revised his estate plan by shifting most of his assets to living trusts after his first wife died and the details of her will were made public.
Many celebrities and wealthy people transfer the bulk of their estates through trusts primarily to avoid publicity.

Yet, the public scrutiny of a will and probate can be an advantage.
Probate provides checks and balances. In addition to the court reviewing the details, heirs and potential heirs can see the asset inventory presented to the court and the details of how the estate is to be distributed. They can determine if assets are missing or someone appears to have persuaded the deceased to change the terms of the will.
A will is more likely to be challenged than a trust. Trusts rarely are challenged, partly because their details aren’t public. Also, the rules for challenging wills are well-established, while there is less law concerning challenges to trusts.
Some people think using primarily a will instead of a living trust is more efficient over the long term, because it is easy to transfer assets in or out of your estate when they are owned in your name. Anything you own at your passing automatically is included in your estate.
With a trust, you have to be sure to name the trust as legal owner of property. Many people fail to transfer legal title of property to the trusts. The trust must have legal title to assets to provide its benefits.
Cost might be a factor for some. A will usually is less expensive to have prepared than a trust.

Some attorneys believe trusts are less likely to be updated. They say people know when a will needs to be updated but often incorrectly believe a trust doesn’t need to be revisited.
A living trust at least theoretically provides for a smoother transition of management and ownership of property.
You initially serve as trustee and manage the property. The successor trustee, or trustees, you named in the trust agreement automatically takes over management of the property after you become disabled or pass away. The successor trustee manages and distributes the trust property according to the terms of the trust. The courts aren’t involved.

When you use a will, however, after you pass away title to property passes from you to the estate and eventually to the final beneficiaries. The probate court supervises the process. If you become disabled, whoever holds your power of attorney has to present it to financial institutions and have them accept it before your assets can be managed. If there’s no power of attorney or financial institutions won’t accept it, the courts might become involved.
Yet, trustee transitions aren’t always smooth. Financial institutions and others who deal with the trust must decide to accept the authority of a successor trustee. Financial firms, in particular, require a high level of substantiation before they will recognize the successor trustee. While a successor trustee might not have to go to court, it could take some time and expense to complete the transition. It is best to be sure everyone who deals with you as trustee is familiar with your named successor and your plans.
Every estate should have a will and is likely to have at least one trust. The issue is which vehicle you use to transfer the bulk of your wealth to the next owners.

Work with your estate planner to determine which fits best with your estate and your goals for cost, efficiency, privacy, and more.