When clients sit across from us at HTG Advisors, one of the most common questions we hear is: “Do I need a will and a trust?” It’s a question that often gets delayed until a major life transition —such as retirement, the birth of a grandchild, or an inheritance—forces the conversation. While we aren’t attorneys and cannot provide legal advice, we can tell you that from a financial planning perspective, the choice between having just a will versus having both plays a crucial role in protecting your family’s wealth and financial information, minimizing tax burdens, and ensuring your financial legacy is preserved according to your wishes.
After helping over 350 families navigate these decisions over our 30+ years in practice, we’ve learned that this decision isn’t just about legal preferences – it’s deeply rooted in your financial circumstances and goals.
Understanding the Basic Differences
Wills: The Foundation of Estate Planning
A will is a legal document that outlines how you want your assets distributed after your death. Wills are often seen as a more cost-effective option versus a trust, and they’re relatively straightforward to create and update. However, one major drawback is that a will must go through probate, the legal process of validating the will and overseeing the distribution of assets.
Probate is highly dependent on where you live. States dictate the probate process, timing, and cost. Some states are speedy and low-cost, others are not. Additionally, probate is a public process, meaning that your will, the value of your assets, debts, and who inherits what becomes part of the public record. This loss of privacy can be concerning for individuals who prefer to keep their financial affairs – and their family’s inheritance – confidential. For those with complex estates or privacy concerns, relying solely on a will may not be the most efficient solution.
Trusts: The Advanced Financial Strategy
Trusts are legal entities that hold and manage assets according to your instructions. You (the grantor) transfer ownership of assets into a separate entity managed by a trustee (which can be you, a family member, or a professional) for the benefit of designated beneficiaries (which can you be you and your heirs.) Unlike wills, trusts can be effective immediately upon creation and can manage assets during your lifetime, not just after death.
While more complex, with setup costs often greater than $1,500, trusts offer compelling advantages: more immediate asset access/transfer to beneficiaries at your death (avoid probate), potential tax savings, asset protection from creditors, and precise control over distributions.
How Your Financial Goals Shape the Decision
Asset Protection and Wealth Preservation
If you’ve built significant wealth or own a business, trusts can shield assets from creditors and future lawsuits. Revocable trusts provide seamless incapacity management, while irrevocable trusts can remove assets from your taxable estate, potentially saving significant estate taxes.
Distribution Control
Trusts are advantageous when you want to control how and when beneficiaries receive assets, providing structured distributions tied to age milestones or specific achievements like education.
Tax Planning Strategy
Estates over $13.99 million (2025) face federal estate taxes of up to 40%. Certain trusts can remove assets from your taxable estate while providing family benefits. Trust structures can also shift income to beneficiaries in lower tax brackets for ongoing savings.
Liquidity and Business Continuity
If your family needs quick asset access, probate delays with wills can create financial hardship. For business owners, trusts provide immediate management succession and sophisticated strategies for transferring business interests while minimizing taxes.
Generational Wealth Transfer
For building generational wealth, trusts offer advanced strategies like generation-skipping and dynasty trusts that preserve wealth for future generations while minimizing transfer taxes.
When Each Makes Financial Sense
Consider Having Just a Will When You Have:
• Simple family situations with adult children
• Limited creditor protection concerns
• A preference for simplicity and lower upfront costs
Consider Adding a Trust When You Have:
• Business ownership or face professional liability
• Minor children or beneficiaries with special needs
• A concern about beneficiaries’ financial management
• A need for privacy and/or control over wealth transfer
• Real property outside of your home state
Combination Strategies
Many HTG clients benefit from hybrid approaches. A “pour-over will” can work alongside a trust, capturing any assets not specifically moved into the trust. This provides comprehensive coverage while maximizing the financial benefits of both strategies.
Making the Right Financial Decision for Your Family
As financial advisors, we recommend evaluating these key questions:
1. What’s the total value of your estate, including life insurance and retirement benefits?
2. How quickly will your beneficiaries need access to funds?
3. What are your state’s probate costs and timelines?
4. Do you have concerns about creditor protection or beneficiary financial responsibility?
5. How complex is your family situation?
6. What are your tax planning objectives?
The Bottom Line
This decision should integrate with your broader financial plan. Estate values, family complexity, tax objectives, and liquidity needs all factor into the choice. Many clients benefit from hybrid approaches using both tools.
Remember, this isn’t a one-time decision. As your financial situation evolves, your estate planning should, too. The most expensive mistake isn’t choosing the wrong strategy – it’s choosing no strategy at all.
At HTG Advisors, we work with estate planning attorneys to ensure these strategies align with your complete financial picture. Whether you start with a simple will or comprehensive trust, protecting your family’s financial future is always the right first step.