Adrianna Stasiuk
Partner, Investment Advisor
A comprehensive estate plan can outline your intentions, protect your loved ones, and preserve your wealth for future generations. But, according to a 2024 survey by Caring.com, less than two out of three American adults have a will.1
Whether you are looking to update your estate plan or you’re just beginning the process, it’s important to understand the differences between wills and trusts.
Let’s explore key aspects of wills and trusts to help inform whether one or both best meet your family’s estate planning needs.
Wills: The Fundamentals
A last will and testament is a legal document that directs the distribution of your assets to your heirs when you pass away. By clearly outlining your wishes in your will, you can help avoid family disputes regarding the division of your estate.
As testator (or creator) of the will, you elect an executor to manage your estate’s affairs upon your death. In addition to detailing how your assets should be distributed, your will may name guardians for minor children (and pets) and provide instructions for funeral and burial arrangements.
If you die without a will, a probate court will decide how to divide and distribute your property to surviving family members based on your state’s intestacy laws. Probate is a public process that can be expensive and, according to the American Bar Association, generally takes six to nine months to complete.2
Trusts: The Basics
Trusts are more complex legal arrangements that can offer greater control over the distribution of your estate than a will alone.
As a grantor, you can open a trust, fund it with assets such as property, investments, or life insurance policies, and appoint a trustee to handle it. The trustee has a fiduciary duty to administer and distribute your assets according to your trust document—and in the best interest of your heirs.
As the name implies, revocable or “living trusts” can be altered or terminated during your lifetime. Because you maintain control over the trust assets, they will be included in your income tax returns and as part of your gross estate when you pass.3 However, revocable trusts can spare your loved ones from the stress and publicity of probate.
With an irrevocable trust, you permanently give up control of any assets placed in the trust. As such, this type of trust cannot be changed or terminated without permission from your beneficiaries. Because the trust is considered a separate tax entity, your trustee will file annual income tax returns for the trust. If implemented correctly, these trust assets will then be shielded from estate taxes when you pass away.3
Various types of trusts serve different estate planning needs. For example, if you have a loved one with a disability, a special needs trust allows you to support them financially without compromising their eligibility for public assistance programs. Or, if you want to transfer assets to your grandchildren—and bypass the estate taxes incurred if they inherited them directly—you can set up a generation-skipping trust (GST).
Your estate planning team can help you determine which types of trusts align with your family’s vision and goals.
Wills vs. Trusts: A Quick Comparison
| Wills | Trusts | |
| Legal Document | Outlines how assets should be distributed after death | Holds and manages assets during and after life |
| Probate | Must go through probate court, which can be lengthy | Can avoid probate, allowing for faster asset distribution |
| Privacy | Becomes public record during probate | Remains private and confidential |
| Control Over Assets | Takes effect after death | Can take effect during the person’s lifetime |
| Cost | Typically less expensive to create upfront | Generally more costly due to complexity |
| Management | No ongoing management after creation | Requires ongoing management and trustee involvement |
| Tax Benefits | Limited, if any | Can provide tax advantages, including estate |
| Flexibility | Limited to post-death distribution | More flexible, can manage assets during life |
| Guardianship | Can designate guardians for minor children/pets | Does not designate guardians |
| Incapacity Planning | None | Manages assets if the person becomes incapacitated |
A properly executed estate plan helps preserve your wealth and safeguard your family’s future. Whether you’re starting from zero or looking to add trusts to an existing plan, Aaron Wealth Advisors can work with your attorneys and accountants to implement personalized strategies that facilitate wealth transfer, optimize taxes, and empower your legacy.
Let’s talk about your financial, estate, and generational goals.
Sources
1 https://www.caring.com/caregivers/estate-planning/wills-survey/
3 https://www.fidelity.com/viewpoints/wealth-management/insights/revocable-and-irrevocable-trusts
DISCLAIMER
*Aaron Wealth Advisors LLC is registered as an investment adviser with the Securities and Exchange Commission (SEC). Aaron Wealth Advisors LLC only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability.
*This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity. The information provided does not take into account the specific objectives or circumstances or any particular investor or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisors. The information contained in this presentation represents factual information, analysis, and/or opinions regarding various investments. Any opinions expressed in this material reflect Aaron Wealth’s views as of the date(s) indicated in the Presentation and are subject to change.
*Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment, investment strategy (including the investments and/or investment strategies recommended by the adviser), or product made reference to directly or indirectly, will be profitable or equal to past performance levels.
*This document contains forward-looking statements, including observations about markets and industry and regulatory trends as of the original date of this document. Forward-looking statements may be identified by, among other things, the use of words such as ”expects,” “anticipates,” “believes,” or “estimates,” or the negatives of these terms, and similar express results could differ materially from those in the forward-looking statements as a result of factors beyond our control. Recipients of the information herein are cautioned not to place undue reliance on such statements. No party has an obligation to update any of the forward-looking or other statements in this document.
*All investment strategies have the potential for profit or loss. The investment strategies illustrated in this document and listed above involve risk, including the risk of loss of principal.
*The firm is not engaged in the practice of law or accounting. Content should not be construed as legal or tax advice. Always consult an attorney or tax professional regarding your specific legal or tax situation.
*This material is proprietary and may not be reproduced, transferred, modified or distributed in any form without prior written permission from Aaron Wealth Advisors. Aaron Wealth reserves the right, at any time and without notice, to amend, or cease publication of the information contained herein. Certain of the information contained herein has been obtained from third-party sources and has not been independently verified. It is made available on an “as is” basis without warranty. Any strategies or investment programs described in this presentation are provided for educational purposes only and are not necessarily indicative of securities offered for sale or private placement offerings available to any investor.